Anil Ambani Banned by SEBI: Reliance Shares Hit Hard Amid Market

Shares of Anil Ambani-led firms, including Reliance Home Finance, Reliance Power, and Reliance Communications, plunged sharply on Monday, hitting their lower circuit limits. This dramatic decline comes as investors flee following the Securities and Exchange Board of India’s (SEBI) decision to ban Ambani and 24 others from the securities market for five years due to allegations of fund diversion from Reliance Home Finance Ltd.

Anil Ambani-led firms

Reliance Power’s stock plummeted 4.99% to Rs 32.73, while Reliance Home Finance Ltd saw a 4.93% drop to Rs 4.24, and Reliance Communications tumbled 4.92% to Rs 2.32. Additionally, Reliance Infrastructure’s shares fell by 2.90% to Rs 205.55. The sharp sell-off in these shares began on Friday and continued unabated.

SEBI’s Penalties and Bans

SEBI has slapped a hefty penalty of Rs 25 crore on Anil Ambani, barring him from holding any position as a director or Key Managerial Personnel (KMP) in any listed company or SEBI-registered entity for the next five years. Additionally, 24 entities have been fined between Rs 21 crore and Rs 25 crore. Reliance Home Finance has also been banned from the securities market for six months and fined Rs 6 lakh. The penalties follow a thorough investigation by SEBI into multiple complaints of fund diversion and siphoning from Reliance Home Finance Ltd during FY 2018–19. The probe uncovered a fraudulent scheme orchestrated by Ambani, with the assistance of RHFL’s KMPs—Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah—where funds were siphoned off under the guise of loans to entities linked to him.

Management’s Disregard for Directives

Despite strong directives from the board of directors to halt risky lending practices and conduct regular reviews of corporate loans, RHFL’s management blatantly ignored these orders. SEBI’s 222-page order on Thursday highlights the reckless and deliberate actions of the company’s management and promoter in approving loans worth hundreds of crores to companies that were essentially hollow—lacking assets, cash flow, net worth, or revenue. This raises serious concerns about the true intent behind these so-called ‘loans,’ especially given that many borrowers had close ties to RHFL’s promoters. Predictably, most of these borrowers defaulted, leading RHFL to miss its debt payments and triggering its resolution under the RBI Framework. This left the company’s public shareholders in a precarious situation.