Markets regulator SEBI has imposed a five-year ban on Anil Ambani, along with 24 other entities, from participating in the securities market. This decision stems from allegations of misappropriation of funds within Reliance Home Finance Limited (RHFL), a company formerly under Ambani’s control.
SEBI’s investigation uncovered a complex scheme led by Ambani and his associates, which involved diverting substantial funds from RHFL. These funds were masked as loans to companies closely linked to Ambani, ultimately leading to significant financial losses for RHFL and its shareholders. The regulator’s findings highlight a severe breach of corporate governance, driven by key managerial personnel under Ambani’s influence.
RHFL’s board had previously issued directives to halt such lending practices, but these were ignored by the company’s management. As a result, many of the so-called “loans” ended up with entities that had minimal financial credibility, contributing to RHFL’s inability to meet its debt obligations and resulting in a dramatic decline in its share price.
In addition to the ban, SEBI has levied fines on Ambani and his associates, including a penalty of ₹25 crore on Ambani himself. The regulator has also barred RHFL from the securities market for six months and fined the company ₹6 lakh for its role in the scheme.
This decision marks a significant moment in the ongoing scrutiny of corporate governance and accountability within large conglomerates, emphasizing the need for stricter compliance and oversight in financial practices.
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