Sebi sends Rs 154.5 cr worth notices to RHFL's promoter over fund diversion

Sebi on Wednesday sent demand notices to six entities, including Reliance Home Finance's promoter entity, asking them to pay Rs 154.50 crore for diversion of funds from the company.

The regulator has warned these entities for attachment of assets and bank accounts if they fail to make the payment within 15 days.

Those who have been sent notices are Crest Logistics and Engineers Pvt Ltd (Now Known as CLE Pvt Ltd), Reliance Unicorn Enterprises Pvt Ltd, Reliance Exchange next Ltd, Reliance Commercial Finance Ltd, Reliance Business Broadcast News Holdings Ltd and Reliance Cleangen Ltd.

The demand notices came after these entities failed to pay the fine imposed on them by the Securities and Exchange Board of India (Sebi) in August.

 

In six separate notices, the markets watchdog directed these six entities to pay Rs 25.75 crore each.

This includes interest and recovery costs within 15 days.

In the event of non-payment of dues, the market regulator will recover the amount by attaching and selling the moveable and immovable property of these entities.

Besides, they face attachment of their bank accounts.

In August this year, Sebi had barred industrialist Anil Ambani, 24 other entities, including former key officials of Reliance Home Finance from the securities market for five years for diversion of funds from the company.

Sebi has imposed a penalty of Rs 25 crore on Ambani and restrained him from being associated with the securities market including as a director or Key Managerial Personnel (KMP) in any listed company, or any intermediary registered with the market regulator, for a period of 5 years.

Also, the regulator barred Reliance Home Finance Ltd (RHFL) from the securities market for six months and slapped a fine of Rs 6 lakh on it.

In its 222-page final order, Sebi found that Anil Ambani, with the help of RHFL's key managerial personnel, had orchestrated a fraudulent scheme to siphon-off funds from RHFL by disguising them as loans to entities linked to him.

Although the Board of Directors of RHFL had issued strong directives to stop such lending practices and reviewed corporate loans regularly, the company's management ignored these orders.

This suggests a significant failure of governance, driven by certain key managerial personnel under the influence of Anil Ambani.

Given these circumstances, the company RHFL itself should not be held equally responsible as the individuals involved in the fraud.

Further, the remaining entities have played the role of being either recipients of illegally obtained loans or conduits to enable illegal diversion of monies from RHFL, the regulator noted.

The 24 restrained entities include former key officials of Reliance Home Finance Ltd (RHFL) -- Amit Bapna, Ravindra Sudhalkar and Pinkesh R Shah -- and Sebi has imposed fine on them for their role in the case.

Also, the regulator levied a fine of Rs 25 crore on Ambani, Rs 27 crore on Bapna, Rs 26 crore on Sudhalkar and Rs 21 crore on Shah.

Additionally, the remaining entities including Reliance Unicorn Enterprises, Reliance Exchange next Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd and Reliance Big Entertainment Private Ltd have been imposed a penalty of Rs 25 crore each.

These fines have been levied on them for either receiving the illegally obtained loans or acted as intermediaries to facilitate the illegal diversion of funds from RHFL.

In February 2022, markets watchdog Sebi had passed an interim order and restrained Reliance Home Finance Ltd, industrialist Anil Ambani and three other individuals (Amit Bapna, Ravindra Sudhakar and Pinkesh R Shah) from the securities market till further orders for allegedly siphoning off funds from the company.