SEBI Demands Rs.130 Crore From Five Entities For Diverting Reliance Home Finance Funds
SEBI Demands Rs.130 Crore From Five Entities For Diverting Reliance Home Finance Funds
Warns the companies of attaching assets and bank accounts if they fail to pay within 15 days
The Securities and Exchange Board of India (SEBI) has issued demand notices of Rs.130 crore to Netizen Engineering, Gamesa Investment Management, Vinayak Ventures, Deep Industrial Finance and Citi Securities and Financial Services for their involvement in the illegal diversion of funds from Reliance Home Finance Ltd.
The market regulator acted after they failed to pay the fine imposed on them in August. In five separate notices, it directed the companies to pay Rs.26 crore each, including interest and recovery costs.
In case of non-payment of dues, SEBI would recover the amount by attaching and selling their moveable and immovable properties. Besides, their bank accounts would be attached.
In August, the markets watchdog barred industrialist Anil Ambani, and 24 others, including former key officials of Reliance Home from the securities market for five years for diversion of funds from the company.
It has imposed Rs.25 crore on Ambani and restrained him for five years from associating with the securities market including as a director or Key Managerial Personnel (KMP) in any listed company, or an intermediary registered with SEBI.
Reliance Home was also barred from the securities market for six months and fined Rs.6 lakh.
In a 222-page order, SEBI stated that Ambani (with the help of KMPs), orchestrated a fraudulent scheme to siphon off funds from Reliance Home by disguising them as loans to entities linked to him.
Though the company’s board of directors issued strong directives to stop the lending practices and reviewed corporate loans regularly, the management ignored the orders. It suggested governance failure by certain KMPs under Ambani’s influence.
SEBI added that the entities were either recipients of illegally obtained loans or conduits to enable illegal diversion of funds.
The 24 restrained entities include former key officials of Reliance Home - Amit Bapna, Ravindra Sudhalkar and Pinkesh R Shah. SEBI levied Rs.27 crore on Bapna, Rs.26 crore on Sudhalkar and Rs.21 crore on Shah.
The remaining entities including Reliance Unicorn Enterprises, Reliance Exchangenext, Reliance Commercial Finance, Reliance Cleangen, Reliance Business Broadcast News Holdings and Reliance Big Entertainment were fined Rs.25 crore each.
Recently, SEBI sent demand notices to six entities, including Reliance Home Finance's promoter entity, demanding Rs.154.50 crore for diverting funds from the company.
The companies are Crest Logistics and Engineers (now known as CLE Pvt Ltd), Reliance Unicorn Enterprises, Reliance Exchangenext, Reliance Commercial Finance, Reliance Business Broadcast News Holdings and Reliance Cleangen.
In 2022, SEBI passed an interim order and restrained Reliance Home, Ambani, Bapna, Sudhakar and Shah from the securities market till further orders for allegedly siphoning off funds from the company.
