Sebi excludes Anil Ambani and 3 others from the markets for alleged embezzlement


The Securities and Exchange Board of India (Sebi) has barred Anil Ambani and three associates from the capital market for alleged misappropriation of funds from Reliance Home Finance (RHFL). The regulator also prohibited them from associating with any listed company, stock broker or any public company with the intention of raising funds.

The restrictions will remain until further notice, Sebi said in an interim order ordering Ambani and several others to “show cause” why further action and investigations should not be taken against them.



“Such misconduct on the part of Noticee no. 2 (Anil Ambani) as Chairman of the company/group smacks of the fraudulent intent of the management of the company first, to misappropriate the funds borrowed from the company intended to be advanced to bona fide third party borrowers to the coffers of various Promoter Group Entities under cover of a series of bogus GPCs (General Purpose Business Loans) and then to cover losses and NPAs resulting from these transactions by concealing the real financial health of the company to shareholders and the general investing public, who could never know the real financial situation of RHFL by examining the fictitious books of accounts presented to them through the stock exchanges,” the Sebi order states.

In a letter dated April 18, 2019, audit firm PWC highlighted certain observations and requested a response from the company’s management and audit committee. The auditor pointed out that the amount of loans disbursed by RHFL under the GPC Loans increased exponentially from Rs 900 crore as of March 31, 2018 to around Rs 7,900 crore as of March 31, 2019.

PWC also pointed out that the borrowers’ net worth was negative and that they had limited or no income and profits.

An investigation revealed that several of these borrowers were RHFL Group companies.

Another forensic audit was carried out by RHFL’s consortium of lenders, led by Bank of Baroda.

The forensic auditor observed that an amount of Rs 14,577 crore was disbursed by RHFL to numerous entities as GPC loans, of which Rs 12,487 crore was disbursed to 47 Potentially Indirectly Related Entities (PILEs).

Another report pointed out that there were 150 loan cases falling under the PILE category between fiscal 2017 and 2019. Of these, 100 loan cases amounting to Rs 8,884 crore were still outstanding in the financial years. RHFL books.

Sebi also launched his own investigation where he uncovered several irregularities in the loan disbursement process and collusion between senior officials to siphon off money from the RHFL.

“To sum up, all of the aforementioned notifyes played their respective roles in unison, duly aided and abetted by other notifyes through a collusive nexus, to translate a pre-arranged plan into action resulting in the diversion of huge amounts of funds from RHFL accounts, a significant portion of which had to be declared NPA shortly after their sanctions,” says Sebi order from longtime member SK Mohanty.

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