Reliance Home Finance: SEBI Issues Rs52 Crore Demand Notice to 2 in Illegal Fund Diversion Case

Moneylife Digital Team 13 November 2024

Investor Interest

Market regulator Securities and Exchange Board of India (SEBI) has asked two entities to pay Rs52 crore in penalties for failing to clear fines imposed for illegally diverting funds from Reliance Home Finance Ltd (RHFL).

In two separate notices, SEBI asked Mohanbir Hi-Tech Pvt Ltd and Indian Agri Services Pvt Ltd to pay the fines within 15 days, failing which the market regulator will attach their assets and bank accounts.

Earlier in August, SEBI imposed a Rs25 crore penalty each on Mohanbir Hi-Tech and Indian Agri Services. The amount has now gone up to Rs26 crore each, including interest at 1% per month from August to November 2024.

In its August order, while coming down heavily on RHFL, Anil D Ambani, the chairperson of Anil Dhirubhai Ambani (ADA) group, several key managerial personnel (KMPs) and ADA group companies, the market regulator slapped a penalty of Rs624.06 crore on 27 entities. These entities include Mohanbir Hi-Tech and Indian Agri Services.

While barring 25 entities, including Mr Ambani, from the securities market for five years, SEBI also restrained the ADA group chief and KMPs of RHFL from being appointed as directors or associated with any listed company.

RHFL was found extending general-purpose corporate loans (GPCL) to group entities with weak financials and to potentially indirectly linked entities (PILE). A forensic audit by Grant Thornton (GT) found that during the review period, Rs14,577.68 crore was disbursed as GPCL, out of which about 88.76% of loans were disbursed to PILE, amounting to Rs12,487.56 crore. As of 31 October 2019, the loans disbursed to PILE were around Rs7,984.39 crore—out of which loans having total dues of Rs2,727.59 crore were declared as non-performing assets (NPAs) on 31 October 2019.

In the order, Ananth Narayan G, whole-time member (WTM) of SEBI, says, "This is also a peculiar case where the Company's management has brazenly defied the diktat of its own board that had raised concerns about GPCL lending and asked the company management to ensure compliance with the law. By a preponderance of probability, the mastermind behind the fraudulent scheme is the chairman of ADAG –Anil Ambani. It is also apparent that Amit Bapna (non-executive director and chief financial officer-CFO), Ravindra Sudhalkar (executive director -ED and chief executive officer-CEO) and Pinkesh R Shah (CFO), KMPs of the Company, played an active role in perpetrating the fraudulent scheme."

"While Anil Ambani was not a director in RHFL, he has used his position as 'chairperson of the ADA group' and his significant indirect shareholding in the holding Company of RHFL to orchestrate the fraud thereby not just adversely affecting RHFL's stakeholders but also the confidence in the integrity of governance structures in regulated financial sector entities," the SEBI WTM says. (Read: Reliance Home Finance Fraud: SEBI Slaps Rs624.06 Crore Penalty on 27, Bars 25 including Anil Ambani from Markets for 5 Years)

Comments

User

r_ashok41

7 months ago

Defaulters should be made to compensate by confisticating their properties since all these people live a luxurious life by taking the creditors money only then justice will be done to the retail people .Law should be add these points in the PMLA act otherwise all these people are smart and know the loopholes and siphon the money .Unless laws are strict these kind of activities will keep on happening