Why has Sebi imposed Rs 10000000 fine on Anil Ambani's son Jai Anmol Ambani?
When Jai Anmol Ambani was on the board of Reliance Home Finance, Sebi said he had approved GPCL loans.
A month after Sebi banned Reliance Group chairman Anil Ambani, the market regulator recently imposed a hefty fine of Rs 1 crore on his son, Jai Anmol Ambani. He has been directed to pay the amount within 45 days. The regulator also levied a fine of Rs 15 lakh on Krishnan Gopalakrishnan, former Chief Risk Officer (CRO) of Reliance Housing Finance.
But why has Sebi imposed Rs 1 crore fine on Jai Anmol Ambani?
Sebi has taken action against Anmol Ambani for his failure to exercise due diligence while approving general-purpose corporate loans (GPCL) in Reliance Home Finance matter. When Jai Anmol was on the board of Reliance Home Finance, Sebi said he had approved GPCL loans. The approval was given even after the company's board of directors had given clear direction not to go ahead with any approval of such loans.
The approval for loan of Rs 20 crore to Accura Productions Private Limited was provided by Anmol Ambani on February 14, 2019, despite the board of directors in their meeting on February 11, 2019, had directed the management to not issue any further GPCL loans, Sebi said in its order on Monday. It added that Anmol did not exercise reasonable due diligence with respect to the entire GPCL lending.
"The noticee 1 (Anmol Ambani), as non-executive director of the company, has taken the company in his own direction and has gone overboard in his role as director. Noticee 1 in doing so, gives a hint of being motivated and definitely not in the interests of the shareholders and has not acted with due care and diligence, and has not maintained high ethical standards, Sebi said. Both Anmol Ambani and Gopalakrishnan violated the provisions of Sebi's LODR (Listing Obligations and Disclosure Requirement) rules.
Anmol, who was on the board of Reliance Capital and Reliance Home Finance and also a director in the other Reliance ADAG group companies where the funds were onward lent, "did not exercise reasonable due diligence with respect to the entire GPCL lending and the onward lending by these GPCL entities to other Reliance ADAG group companies, including Reliance Capital", it added.
(With inputs from PTI)