In a massive development, the Securities and Exchange Board of India (SEBI) on Friday banned Anil Ambani and 24 other entities from the securities market for five years for diversion of funds from the company. Apart from Anil Ambani, SEBI also banned former key officials of Reliance Home Finance from the securities market. Not only this, but SEBI also imposed a heavy fine of Rs 25 crore on Anil 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. Now, the question arises what is Anil Ambani ban reason or why SEBI banned Anil Ambani? Below is everything you need to know about Anil Ambani SEBI Ban Reason-
Why did SEBI ban Anil Ambani?
As per reports, SEBI has released a 222-page final order banning Anil Ambani and 24 other entities. Going by SEBI's official order, the financial body found that industrialist 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.
SEBI also observed that 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. As a result, SEBI found a major 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.
Apart from the Rs 25 crore fine on Ambani, SEBI also barred Reliance Home Finance from the securities market for six months and slapped a fine of Rs 6 lakh on it.
As soon as SEBI announced Anil Ambani's ban, Reliance Dhirubhai Ambani Group (ADAG) stocks witnessed a freefall in the stock market. Notably, Reliance Home Finance shares had touched the 5 percent upper circuit during early morning deals but after the SEBI's decision, it reportedly hit a 5% lower circuit.
Reliance Infrastructure's share price also fell around 12 percent after the fresh order by SEBI. Reliance Power's share price was down by around 5 percent against its previous close of Rs 36.30 apiece on the NSE.