Sebi Demands Rs 129 Crore from RHFL and Five Others Over Illegal Fund Diversion

The Securities and Exchange Board of India (Sebi) has demanded that six entities, including Reliance Home Finance Ltd (RHFL) and some former company officials, pay Rs 129 crore. This payment is for the unlawful diversion of funds from the company. Sebi has warned that if the payment is not made within 15 days, it will seize their assets and bank accounts.

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Notices were issued to Reliance Home Finance, Ravindra Sudhalkar, Amit Bapna, Pinkesh Shah, Phi Management Solutions Pvt Ltd, and Adhar Project Management and Consultancy Pvt Ltd. These notices followed their failure to pay fines imposed by Sebi in August. The amounts range from Rs 6.25 lakh to Rs 28.08 crore, including interest and recovery costs.

Enforcement Actions by Sebi

If these entities do not comply with the payment demand, Sebi plans to recover the dues by attaching and selling their movable and immovable properties. Additionally, they may face detention in prison and attachment of their bank accounts. On a recent Monday, Sebi also asked five other entities to pay Rs 130 crore for similar fund diversions from RHFL.

The five entities receiving notices were Netizen Engineering, Gamesa Investment Management, Vinayak Ventures, Deep Industrial Finance, and Citi Securities and Financial Services. Earlier in the week, Sebi had issued demand notices to six entities including RHFL's promoter entity Crest Logistics and Engineers, now known as CLE Pvt Ltd. They were asked to pay Rs 154.50 crore for fund diversion.

Penalties on Anil Ambani and Associates

In August, Sebi barred industrialist Anil Ambani along with 24 others from the securities market for five years due to fund diversion from RHFL. A penalty of Rs 25 crore was imposed on Ambani, who is also restricted from serving as a director or Key Managerial Personnel (KMP) in any listed company for five years.

Fines ranging from Rs 21 crore to Rs 25 crore were levied on 24 entities involved in the scheme. RHFL was barred from the market for six months and fined Rs 6 lakh. Sebi's investigation revealed that Anil Ambani orchestrated a fraudulent scheme with RHFL's KMPs—Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah—to siphon off funds disguised as loans.

Role of Involved Entities

The remaining entities either received illegally obtained loans or acted as conduits for the illegal diversion of money from RHFL. Ambani used his position as chairperson of the ADA group and his significant indirect shareholding in RHFL's holding company to facilitate this fraud.

Sebi has barred these 25 entities including Ambani and former officials from the securities market for five years. Ambani along with three former RHFL officials—Bapna, Sudhalkar, and Shah—are restrained from any association with the securities market including roles as directors or KMPs in listed companies for five years.

Sebi also imposed fines of Rs 27 crore on Bapna, Rs 26 crore on Sudhalkar, and Rs 21 crore on Shah. These actions highlight Sebi's commitment to maintaining integrity in financial markets by holding accountable those involved in financial misconduct.