- Friday, September 13, 2024
The market watchdog had imposed a fine on Ambani, saying he orchestrated a scheme to “siphon off” funds from Reliance Home Finance
By: Shajil Kumar
ANIL AMBANI is reviewing a Securities and Exchange Board of India (Sebi) order imposing a fine and banning him from capital markets for five years in an alleged fund diversion case and will take appropriate next steps as legally advised, his spokesperson has said.
Ambani had resigned from the board of Reliance Infrastructure Ltd and Reliance Power Ltd, pursuant to Sebi’s interim order dated February 11, 2022 in the matter pertaining to Reliance Home Finance Ltd, the spokesperson said on Sunday.
“He is in compliance with the said interim order (of February 11, 2022) for the last two and half years,” the statement said.
Regarding the Sebi order the spokesperson said, “Mr Ambani is reviewing the final order dated August 22, 2024 passed by Sebi in the said matter, and will take appropriate next steps as legally advised.”
The market watchdog had also imposed a fine of ₹250 million (£2.26m) on Ambani, saying he orchestrated a scheme to “siphon off” funds from Reliance Home Finance, a listed subsidiary of conglomerate Reliance Group of which he is chairman.
The ban means that he and the other 24 will not be able to access the securities market and are prohibited from buying, selling or otherwise dealing in securities, directly or indirectly.
‘Not binding’
In a separate statement, Mumbai-listed Reliance Infrastructure Ltd said it “was not a noticee or party to the proceedings before Sebi in which the order is passed. No directions are given in the order against Reliance Infrastructure Ltd”.
“Mr Ambani had resigned from the board of directors of Reliance Infrastructure Ltd pursuant to the interim order dated February 11, 2022 passed by Sebi in the same proceedings. Therefore, the order dated August 22, 2024 passed by Sebi has no bearing whatsoever on the business and affairs of Reliance Infrastructure Ltd,” it said.
Reliance Power, the other listed company of Anil Ambani’s group, also issued a similar statement saying Ambani had resigned in 2022 and that the latest Sebi order has no bearing on it.
Sebi in the August 22 order had stated that a “fraudulent” scheme “siphoned off” funds from Reliance Home Finance, which provides loans for housing and construction, by structuring them as loans to credit-unworthy borrowers.
Most of these borrowers were linked to “promoters”, the regulator had said.
Faltering career graph
Anil Ambani and his elder brother Mukesh had in July 2006 split their father Dhirubhai Ambani-created Reliance Industries Ltd.
Anil Ambani’s Reliance Group spanned financial services, infrastructure and telecommunications while the elder brother got the traditional oil refining and petrochemicals business.
Over the last few years, Anil Ambani has seen three of the largest firms within the group, including Reliance Communications, Reliance Capital, and Reliance Infrastructure, undergoing bankruptcy over unpaid debt.
Sebi has charged that more than ₹90 billion (£813.08m) worth of loans from Reliance Home Finance were made to “nondescript borrowers who had no demonstrable financial ability to repay any of it”.
The other 24 banned include executives of Anil Ambani’s Reliance Group and other unlisted companies connected to him. (PTI)
