The securities and exchange board of India, SEBI Husband Anil Ambani and other 24 entities from securities markets for five years. The decision was taken after SEBI observed diversion of funds and slapped a 25 crore fine on Ambani for orchestrating a fraudulent scheme.
Let us now understand why the step was taken. SEBI recently opened an investigation into RHFL which is Reliance home Finance Limited. This is a non banking finance company or NBFC which is focused on housing loans, loans against property and construction finance.
The SEBI received multiple complaints, reports of alleged diversion or symphoning of funds within the company, the major promoter of RHFL was Reliance capital limited (RCL). With a shareholding of 47.91%, Anil Ambani was a promoter and non-executive and non independent directors of RCL.
During the financial year 2018 19 as per SEBI’s foundings, the loans extended by RHFL to corporates increase from ?3742.60 crore in ?2017-18, 8670.80 crore in 2018-19. It was found that in the year 2018-19 RHFL disbursed a series of large general purpose working capital (GPC) loans to the borrowers who had extremely weal financials.
These borrowers had negative or negligible net worth. Moreover, they did not also have substantial profit, assets, cash flows and businesses. SEBI found that RHFL deviated from standard credit due diligence and processes in approving GPC loans.
As per a report by The Indian Express, an analysis of 70 loan applications for gpc loan worth ?6187 crore, showed that as many as 62 applications were approved on the same date. In 27 cases, the loan too was disbursed to the account of the borrower entity on the same date of application. SEBI also stated that the ownership and management pattern of these companies, both lender and borrowers, leads to the conclusion that the loans were motivated by the Noticee
Number 2’s (Anil Ambani) direct or indirect benefit through fund transfers to these companies.
