The Securities and Exchange Board of India (SEBI) has barred Anil Ambani, Reliance Home Finance Ltd From Securities Market.
The root of the present proceedings can be traced to multiple sources inter alia, a letter of Price Waterhouse & Co. (PWC) addressed to Reliance Home Finance Limited intimating their resignation as the Statutory Auditor of the Company citing various grounds & reasons; certain complaints received by Securities and Exchange Board of India alleging siphoning off/diversion of funds of RHFL by promoters and management of the Company; and also receipt of multiple Fraud Monitoring Returns from Banks alleging, therein amongst others, that funds borrowed by RHFL from different lenders were partly used towards repayment of loans etc. It was also complained that various, connected parties and companies with weak financials were used as conduits to siphon off funds from RHFL to entities connected to the promoter company viz., Reliance Capital Limited.
Based on the aforesaid complaints, an investigation was undertaken by SEBI for the period of FY 2018-19. The focus of the said investigation was broadly to investigate into the manner in which the loans were disbursed by RHFL during the period of 2018-19 to several borrowing entities, so as to ascertain if any provision of Securities and ExchangeBoard of India Act, 1992 (hereinafter referred to as the “SEBI Act, 1992”), Securities Contracts (Regulation) Act, 1956 (hereinafter referred to as the “SCRA”), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations/SEBI (LODR Regulations)”), Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (“PFUTP Regulations”) etc., have been violated.
The full time member of SEBI S.K.Mohanty has observed that the foregoing prima facie observations contained in this Order, are made on the basis of the material available on record. The said prima facie findings shall also be considered as a show cause notice and the afore-said Noticees are directed to show cause as to why suitable directions/prohibitions under Section 11 (4) and 11B of SEBI Act, including the directions of restraining them from accessing the securities market including buying, selling or otherwise dealing in securities in any manner whatsoever, directly or indirectly, for a specified period and further restraining them from associating with any listed company and any registered intermediary, should not be issued against them. The Noticee nos. 3, 4 and 5 are also called upon to show cause as to why any other suitable directions including directions of recovery of remuneration (fully or partly) as paid by RHFL during the period under investigation, be not issued against them.
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