On August 24, 2024, the Securities and Exchange Board of India (Sebi) imposed a five-year ban on industrialist Anil Ambani and 24 associated entities from participating in the securities market. This action follows allegations of a fraudulent scheme involving the diversion of funds from Reliance Home Finance Limited (RHFL). Ambani, along with these entities, has also been fined ₹25 crore.
Sebi’s investigation uncovered a scheme where RHFL disbursed loans totaling ₹9,295.25 crore to various entities. Of these, ₹4,944.34 crore was channeled to 13 specific borrowers, who then redirected ₹4,013.43 crore to nine promoter-related entities. Many of these borrowers had poor financial standings and insufficient collateral, leading to a significant portion of these loans becoming non-performing assets (NPAs).
The investigation revealed that despite board instructions to halt new loans, RHFL continued disbursing funds with Ambani’s approval, adversely impacting the company’s stakeholders and public investors. This led to a severe decline in RHFL’s stock price from ₹59.60 in March 2018 to ₹0.75 by March 2020.
In addition to banning Ambani and others, Sebi has also barred Reliance Home Finance from the capital markets for six months and fined the company ₹6 lakh. The fallout saw sharp declines in the shares of Reliance Infrastructure, Reliance Power, and Reliance Home Finance.
