The Securities and Exchange Board of India (SEBI) has imposed a five-year ban on industrialist Anil Ambani and 24 others, including top executives of Reliance Home Finance Ltd. (RHFL), from participating in the securities market. This move follows SEBI’s investigation into the diversion of RHFL funds through questionable loans, which led to significant financial losses and raised concerns among investors.
In addition to the ban, SEBI has levied a ₹25 crore fine on Ambani and barred him from holding any directorial or key managerial positions in listed companies or entities registered with the regulator for the same period. RHFL itself has been barred from the securities market for six months and fined ₹600,000.
The investigation revealed that RHFL, under the leadership of Ambani and key executives, disbursed substantial loans to entities with weak financial profiles without proper due diligence or collateral. SEBI’s findings highlighted serious internal control failures and the circumvention of established credit protocols within the company. Despite a direct order from the RHFL board to cease such disbursements, the company continued to issue these loans, further exacerbating the situation. Key players involved in this scandal have also been heavily fined for their roles in facilitating or benefiting from the improper loan disbursements.
Bapna, the former CFO of RHFL and a critical member of the credit committee, was instrumental in approving loans despite significant departures from standard protocols. Even after the board issued a directive to halt the disbursement of GPC loans, Bapna continued to authorize these transactions.
As the chief executive of RHFL, Sudhalkar bore the responsibility of overseeing the loan approval process and ensuring proper management. However, SEBI noted that he disregarded the board’s instructions, failed to recover funds, and did not enforce guarantees, ultimately contributing to the financial decline of the company.
Shah, who served as the CFO overseeing financial and accounting operations, endorsed the company’s financial statements as accurate, despite being fully aware of the dubious loan practices and the auditor’s concerns, according to SEBI’s order on Thursday.
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