Shares of Anil Ambani-led group companies came under heavy selling pressure on Friday after markets regulator the Securities and Exchange Board of India banned Anil Ambani from participating in the stock markets for a period of five years.
The development sent shares of Reliance Power down 3.3 per cent, Reliance Home Finance down 5 per cent and Reliance Infrastructure down 5.65 per cent.
It comes later Sebi Ambani, along with 24 others who are notified, including former RHFL bigwigs, has been banned from participating in the stock market for five years. Anil Ambani has also been ordered to pay Rs 25 crore and, until the ongoing forensic audit is completed, has been banned from associating with any listed company or any listed entity on the exchange. SEBI as director or KMP.
Reliance Home Finance has also been banned from participating in the stock market for six months and fined Rs 6 lakh.
In a detailed 222-page order, Sebi held that Ambani, with the help of key RHFL management personnel, had hatched a fraudulent scheme to siphon off funds from RHFL on the pretext of loans extended to entities related to him. Though these malpractices have been brought to the notice of the RHFL board from time to time and even in the face of its periodic scrutiny at the board level in relation to corporate borrowings, the RHFL management has turned a deaf ear.
The market regulator noted that while the company itself could not be held as liable as the individuals who perpetrated the fraud, the entities involved were either recipients of the illegal loans or were facilitating channels for the illegally diverted money.
The regulator’s findings confirmed that “the noticee No. 2 (Anil Ambani) orchestrated and controlled a fraudulent scheme to siphon off funds from the listed company, RHFL, through his KMPs, by structuring principal transactions as ‘loans’ to credit intermediaries, who were not credit worthy, all of whom were associates of the noticee No. 2 (Anil Ambani).”
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