For three months, SEBI has barred Anil Ambani and others from trading
Amit Bapna, Ravindra Sudhakar, and Pinkesh R Shah are the three others who have been prohibited by SEBI
Reliance Home Finance, its promoter and businessman Anil Ambani, and three others were forbidden from buying, selling, or dealing in securities by the Securities and Exchange Board of India (SEBI) on Friday (February 12).
Until further orders, the restricted cannot trade with securities, either directly or indirectly, in any way, according to SEBI. The decision to bar Ambani and other individuals from trading in securities was made in response to allegations that they were siphoning funds from the company. Amit Bapna, Ravindra Sudhakar, and Pinkesh R Shah are the other three.
In a 100-page interim order, SEBI also noted that the individuals will not be able to associate "themselves with any intermediary registered with Sebi, any listed public company or acting directors/ promoters of any public company which intends to raise money from the public till further orders."
In total, 28 individuals and businesses would be affected by the order connected to the alleged syphoning off of funds from the company.
According to a PTI report, the SEBI investigation looked into how Reliance Home Finance Ltd (RHFL) disbursed loans to several borrowing firms in 2018-19.
The market regulator noted that "the root of the present proceedings can be traced to multiple sources, inter alia, a letter of Price Waterhouse & Co addressed to RHFL intimating their resignation as the statutory auditor of the company; and complaints received by Sebi alleging siphoning off/diversion of funds of RHFL by promoters and management of the company."
SEBI noted that banks had filed multiple Fraud Monitoring Returns stating, among other things, that cash borrowed by RHFL from various lenders were utilised in part to repay loans.
"It is noted that one individual person Anil Ambani, who controls the company due to his position as a promoter and controlling shareholder by way his direct and indirect shareholding, is seen to be exercising unfettered powers...," SEBI said.