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Anil Ambani Mulls Sebi Ban
Anil Ambani, Sebi order, Reliance Home Finance, fund diversion case, securities market ban
Businessman Anil Ambani is reviewing a recent Sebi order that imposes a five-year ban from the securities market and a ₹25 crore fine due to alleged fund diversion. He has resigned from relevant company boards and will decide on next steps based on legal advice.
The information provided in this news article is based on current statements and available data as of August 25, 2024. The situation is subject to change as new developments occur. Readers are encouraged to consult additional sources for the most up-to-date information.
New Delhi: Business magnate Anil Ambani is currently assessing the Securities and Exchange Board of India’s (Sebi) recent order, which has imposed a significant fine and a five-year ban on him from participating in the capital markets. This order, dated August 22, 2024, comes in response to allegations of fund diversion involving Reliance Home Finance Ltd., a listed subsidiary of the Reliance Group that Ambani chairs.
According to a statement from Ambani’s spokesperson, the businessman is meticulously reviewing the final order and will proceed with necessary actions based on legal counsel. This follows his earlier compliance with a Sebi interim order from February 11, 2022, which led to his resignation from the boards of Reliance Infrastructure Ltd. and Reliance Power Ltd. The spokesperson emphasized that Ambani has adhered to the interim order for the past two and a half years.
The Sebi order also levied a fine of ₹25 crore against Ambani, accusing him of orchestrating a scheme to misappropriate funds from Reliance Home Finance. The regulator claims that this scheme involved structuring loans to borrowers who were not creditworthy, with many of these borrowers having connections to the company’s promoters.
The ban imposed by Sebi means that Ambani, along with 24 other individuals named in the order, will be prohibited from trading or dealing in securities in any form for the next five years. This ban effectively restricts their ability to access the securities market.
In response to the Sebi order, Reliance Infrastructure Ltd. issued a statement clarifying that it was not involved in the Sebi proceedings. The company reiterated that the August 22 order does not affect its business or operations, noting that Ambani’s resignation from the board had been in compliance with the earlier interim order. Reliance Power, another company within Ambani’s group, issued a similar statement, underscoring that the new Sebi order does not impact it either.
The Sebi order highlighted that over ₹9,000 crore worth of loans from Reliance Home Finance were issued to borrowers lacking sufficient financial capacity to repay. The regulator alleged that many of these borrowers were linked to company promoters, suggesting a systematic scheme to divert funds.
Anil Ambani’s Reliance Group has faced significant financial challenges in recent years. Following the split of Reliance Industries Ltd. in July 2006, which divided the conglomerate between Ambani and his elder brother Mukesh, the Reliance Group has seen several major companies, including Reliance Communications, Reliance Capital, and Reliance Infrastructure, facing bankruptcy due to unpaid debts.
The August 22 order adds to the ongoing scrutiny of Ambani’s business practices. The ban and fine come amidst a broader context of financial difficulties and regulatory challenges faced by the Reliance Group. The resolution of this matter will depend on the outcomes of ongoing reviews and potential legal actions.
As Ambani and his legal team deliberate on the appropriate course of action, the business community and investors will be closely watching for further developments. The outcome of this review could have significant implications for Ambani’s business ventures and his involvement in the securities market
For now, Ambani’s spokesperson has reiterated that the businessman is committed to addressing the Sebi order through the appropriate legal channels and will act in accordance with legal advice.
