Reliance Group chairman Anil Ambani and other entities have filed a plea against market regulator Sebi's order on Reliance Home Finance (RHFL), imposing a total penalty of Rs 625 crore on 26 individuals, Business Standard reported. The matter will be heard by the Securities Appellate Tribunal (SAT) on October 18.
Reliance Commercial Finance, a subsidiary of Reliance Capital, and RFHL former chief financial officer (CFO) Pinkesh Shah have also challenged the Sebi order in the tribunal in separate pleas. In August this year, Sebi had barred Anil Ambani from participating in the securities market for five years. It also imposed a penalty of Rs 25 crore on him. In an order dated August 22, Sebi had alleged siphoning off of money from RHFL by doling out loans to borrowers linked with the promoters.
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The regulator barred RHFL from the securities market for six months and slapped a fine of Rs 6 lakh on it. Meanwhile, the market cap of RHFL stands at Rs 230 crore as of October 15. In its 222-page final order, Sebi found that 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.
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. Ambani used his position as ‘chairperson of the ADA group’ and his significant indirect shareholding in the holding company of RHFL to orchestrate the fraud.
