Indian Markets Regulator Imposes Five-Year Ban on Anil Ambani

India’s markets regulator, the Securities and Exchange Board of India (SEBI), announced on Thursday the imposition of a five-year ban on Anil Ambani and 24 others from participating in the securities market. This decision was made based on allegations of fund diversion.

SEBI also levied a fine of 250 million rupees, approximately $3 million, on Ambani. The regulator stated that he was the orchestrator of a scheme aimed at siphoning funds from Reliance Home Finance Ltd, which is a publicly listed subsidiary of the Reliance Group, whose chairman is Anil Ambani.

The ban prohibits Ambani and others from buying, selling, or otherwise dealing in securities, whether directly or indirectly. According to SEBI, the scheme in question involved the diversion of substantial funds from Reliance Home Finance by structuring these as loans to credit-unworthy borrowers, most of whom were linked to company promoters.

SEBI characterized the actions taken by Ambani and his associates as «fraudulent,» asserting that they concealed significant financial realities from shareholders. More than 90 billion rupees in loans were reportedly made to borrowers without any credible financial ability to repay them.

Additionally, SEBI indicated that over 50 billion rupees were lent to entities connected to the promoters of the Reliance Group. Given the inherent credit weaknesses associated with these borrowers, the likelihood of default was alarmingly higher than what was disclosed in financial statements.

The SEBI expressed concern over the governance breakdown within the company, indicating that the actions were orchestrated by the promoter with the assistance of the company’s management. The other 24 individuals banned by SEBI include executives from both Reliance Group and other unlisted firms affiliated with Anil Ambani.