Synopsis: Sebi has banned Anil Ambani and 24 others from the securities market for five years, fined Rs 25 crore over RHFL’s mismanagement, and barred RHFL from the market for six months with a Rs 6 lakh fine.
The Securities and Exchange Board of India (Sebi) has imposed a five-year ban on industrialist Anil Ambani, along with 24 others, from participating in the securities market. This stringent action stems from an investigation into Reliance Home Finance Ltd. (RHFL), a company associated with Ambani, where funds were allegedly diverted through dubious loan disbursements, causing significant financial damage and raising alarm among investors.
Sebi's probe revealed that RHFL, under the leadership of Ambani and key executives, engaged in the disbursement of loans through Guaranteed Payment Credit (GPC) mechanisms to entities with weak financial standings—entities that would typically not qualify for such substantial financial support. These GPC loans, issued during FY18 and FY19, amounted to thousands of crores and were disbursed without the requisite collateral or security, marking a severe deviation from standard credit due diligence practices.
Further investigation showed that RHFL’s management blatantly disregarded internal credit ratings and waived critical risk assessment procedures, allowing these risky loans to be processed unchecked. As a result, Sebi has not only banned Ambani from the securities market but has also barred him from holding any directorial or key managerial positions in listed companies or entities registered with the regulator for five years. A hefty penalty of Rs 25 crore has also been imposed on him.
Additionally, RHFL itself has been barred from the securities market for six months and fined Rs 6 lakh as part of Sebi's sweeping actions against the alleged financial mismanagement within the company.
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