The Securities and Exchange Board of India (Sebi) has imposed significant penalties on Anil Ambani and 24 other entities, including former officials of Reliance Home Finance Ltd (RHFL), for diverting company funds. Anil Ambani faces a five-year ban from the securities market and a hefty fine of Rs 25 crore.

Under Sebi's ruling, Ambani is also barred from holding any director or Key Managerial Personnel (KMP) positions in listed companies or Sebi-registered intermediaries during this period.

RHFL has been prohibited from the securities market for six months and fined Rs 6 lakh. Sebi's investigation revealed that Ambani, with the help of RHFL’s key personnel, orchestrated a scheme to siphon off funds from the company by disguising them as loans to entities associated with him.

Despite directives from the Board of Directors to stop such lending practices, RHFL’s management ignored these orders, highlighting severe governance failures. Sebi’s final order noted that the scheme involved fraudulent activities, with Ambani and RHFL’s KMPs orchestrating a scheme to divert funds to entities linked with Ambani.

The investigation showed that substantial loans were sanctioned to entities with weak financial backgrounds, many of whom defaulted on repayments. This financial mismanagement led to RHFL’s failure to meet its obligations and eventually resulted in its resolution under the RBI Framework. As a consequence, public shareholders faced significant losses, with RHFL’s share price dropping drastically from Rs 59.60 in March 2018 to just Rs 0.75 by March 2020. Currently, over 900,000 shareholders are dealing with substantial losses.

In addition to Ambani, fines have been levied on former RHFL officials Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah, as well as other entities involved. Bapna, Sudhalkar, and Shah have been fined Rs 27 crore, Rs 26 crore, and Rs 21 crore, respectively. Other entities, including Reliance Unicorn Enterprises and Reliance Big Entertainment Private Ltd, have also been fined Rs 25 crore each.

In February 2022, Sebi had issued an interim order banning Reliance Home Finance Ltd, Anil Ambani, and three others from the securities market pending further investigation.

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