Mumbai: Market regulator SEBI Banned late Friday night Anil Ambanithree of his associates and Reliance Home FinanceOne of his former group companies, for three months off the market for misusing company funds and converting it to other group entities to repay debts. Ambani and others – Amit Bapna, Ravindra Sudhalkar, Pinkesh R Shah – were also barred from associating with any of the listed entities.
The case pertains to Reliance Home Finance’s misappropriation of funds, for which its then auditors Pricewaterhouse & Company (PwC) refused to sign the annual accounts and then resigned.
Ambani, Amit Bapna, Ravindra Sudhalkar, Pinkesh R Shah and Reliance Home Finance are “barred from buying, selling or dealing in securities in any manner, directly or indirectly, until further orders”. SEBI also said that Ambani, Bapna, Sudhalkar and Shah were “barred from acting as directors/promoters of any intermediary registered with SEBI, any listed public company or any public company, which would be intends to raise money from the public till orders.”
Sebi whole-time member SK Mohanty, in the 100-page order, said the genesis of the proceedings can be traced to multiple sources, including the resignation of Reliance Home Finance by PwC as its statutory auditor, citing various grounds and reasons. letter is included. SEBI had also received complaints from people alleging diversion/diversion of funds of the company by its promoters and management.
Besides this, the regulator had also received several fraud monitoring returns from banks alleging that funds borrowed by RHFL from various lenders were partially used for repayment of loans etc. SEBI had also received complaints that various, associated parties and companies with weak financials were “used to divert funds from (the company) to entities linked to the promoter company”, which is Reliance Capital.
The order said that acting on these letters and complaints, SEBI initiated an inquiry into the affairs of Reliance Home Finance for the financial year 2018-19 and found that most of the allegations were true.
SEBI found that Reliance Home Finance had transferred funds to at least 13 entities, including Citi Securities and Financial Services, Tulip Consultant and Ariane Movie Production. These loans were concealed as general purpose corporate loans (GCPL), a legal practice for accounting purposes. For example, a forensic audit found that during FY19, Rs 14,578 crore was disbursed by the company to a number of entities as GPCL, of which Rs 12,489 crore pertained to the promoters and the management of Reliance Home Finance, 47. companies were distributed.
The case pertains to Reliance Home Finance’s misappropriation of funds, for which its then auditors Pricewaterhouse & Company (PwC) refused to sign the annual accounts and then resigned.
Ambani, Amit Bapna, Ravindra Sudhalkar, Pinkesh R Shah and Reliance Home Finance are “barred from buying, selling or dealing in securities in any manner, directly or indirectly, until further orders”. SEBI also said that Ambani, Bapna, Sudhalkar and Shah were “barred from acting as directors/promoters of any intermediary registered with SEBI, any listed public company or any public company, which would be intends to raise money from the public till orders.”
Sebi whole-time member SK Mohanty, in the 100-page order, said the genesis of the proceedings can be traced to multiple sources, including the resignation of Reliance Home Finance by PwC as its statutory auditor, citing various grounds and reasons. letter is included. SEBI had also received complaints from people alleging diversion/diversion of funds of the company by its promoters and management.
Besides this, the regulator had also received several fraud monitoring returns from banks alleging that funds borrowed by RHFL from various lenders were partially used for repayment of loans etc. SEBI had also received complaints that various, associated parties and companies with weak financials were “used to divert funds from (the company) to entities linked to the promoter company”, which is Reliance Capital.
The order said that acting on these letters and complaints, SEBI initiated an inquiry into the affairs of Reliance Home Finance for the financial year 2018-19 and found that most of the allegations were true.
SEBI found that Reliance Home Finance had transferred funds to at least 13 entities, including Citi Securities and Financial Services, Tulip Consultant and Ariane Movie Production. These loans were concealed as general purpose corporate loans (GCPL), a legal practice for accounting purposes. For example, a forensic audit found that during FY19, Rs 14,578 crore was disbursed by the company to a number of entities as GPCL, of which Rs 12,489 crore pertained to the promoters and the management of Reliance Home Finance, 47. companies were distributed.
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