Businessman Anil Ambani is reviewing an order by the Securities and Exchange Board of India (Sebi) imposing a fine on him and barring him from capital markets for five years in the alleged misappropriation of funds case. He will take appropriate further action as recommended by law, his spokesman said in a statement on Sunday.
Ambani, the spokesperson said in a statement, has 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 concerning Reliance Home Finance Ltd.
He “has been complying with the said temporary restraining order (dated February 11, 2022) for two and a half years,” the statement said.
On the August 22 order barring him and 24 others from accessing the securities market for five years for misappropriation of funds, the spokesperson said, “Mr. Ambani is reviewing the final order of Sebi dated August 22, 2024 in the said matter and will take appropriate next steps as per legal advice.”
The Sebi had also fined Ambani Rs 25 crore for allegedly hatching a scheme to “divert” funds from Reliance Home Finance, a listed subsidiary of the conglomerate Reliance Group, of which he is chairman.
The ban means that he and the other 24 have no access to the securities market and are prohibited from buying, selling or otherwise dealing in securities, directly or indirectly.
In a separate statement, Mumbai-listed Reliance Infrastructure Ltd said it was “neither a party nor a participant in the proceedings before Sebi in which the order was passed. There are no directions contained in the order against Reliance Infrastructure Ltd.”
“Mr. Ambani has resigned from the board of Reliance Infrastructure Ltd pursuant to the interim order dated February 11, 2022 passed by the Sebi in the same proceedings. Therefore, the order dated August 22, 2024 passed by the Sebi has no impact 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’s retirement is scheduled for 2022 and the recent Sebi order has no impact on it.
In the August 22 order, Sebi had said that a “fraudulent” scheme had “diverted” funds from Reliance Home Finance – a home and construction loan provider – by structuring the funds as loans to borrowers with poor creditworthiness.
Most of these borrowers have connections to “promoters,” the regulator said.
Anil Ambani and his elder brother Mukesh spun off Reliance Industries Ltd., a company founded by their father Dhirubhai Ambani, in July 2006. Anil Ambani’s Reliance Group included financial services, infrastructure and telecommunications, while the elder brother took over the traditional oil refining and petrochemicals business.
In recent years, Anil Ambani has seen three of the group’s largest companies – including Reliance Communications, Reliance Capital and Reliance Infrastructure – file for bankruptcy due to unpaid debts.
Sebi alleged that Reliance Home Finance had given loans worth over Rs 90 billion to “unknown borrowers who had no proven ability to repay the money even in part”.
The other 24 banned include executives of Anil Ambani’s Reliance Group and other unlisted companies associated with him.
