Business owners are expected to be ethical, especially concerning their business operations. Unfortunately, some still take advantage of their position to satisfy their selfish desire.
Despite being the founder of Reliance Group, an Indian company that offers several services from various sectors, Anil Ambani illegally transferred funds from Reliance Home Finance (RHFL), a subsidiary company. However, he didn’t do it alone. He collaborated with 24 other entities, including former top employees of Reliance Home Finance (RHFL).
As a result, the Press Trust of India (PTI) reported that the Securities and Exchange Board of India (Sebi) gave Anil Ambani, former top employees of RHFL (Amit Bapna, Ravindra Sudhalkar, and Pinkesh R Shah), other entities (Reliance Unicorn Enterprises, Reliance Exchange next Lt, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, and Reliance Big Entertainment Private Ltd) and RHFL several punishments such as the following:
- Anil Ambani cannot buy, sell, or deal in securities for 5 years.
- He was expected to pay a fine of Rs 25 crore.
- During those 5 years, he cannot be a director or Key Managerial Personnel (KMP) in any company listed on the stock exchange or registered with Sebi.
- Ambani was expected to pay a fine of Rs 25 crore, Bapna (Rs 27 crore), Sudhakar (Rs 26 crore), and Shah (Rs 21 crore).
- Reliance Unicorn Enterprises, Reliance Exchange Next Lt, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, and Reliance Big Entertainment Private Ltd were to pay a fine of Rs 25 crore per head for partaking in the illegal loan process.
- RHFL cannot buy, sell, or deal in securities for 6 months.
- RHFL was expected to pay a fine of Rs 6 lakh.
- In February 2022, Sebi temporarily banned Reliance Home Finance Ltd, Anil Ambani, Amit Bapna, Ravindra Sudhakar, and Pinkesh R Shah from participating in the stock market till further notice.
So how did he pull this trick?
Sebi did some thorough research and learned that Anil Ambani collaborated with top employees of RHFL to take a certain amount of money from the company. However, they claimed it was a loan offered to another company to make the transaction seem legal.
The PTI also notes that during the order of the loan, the RHFL Board of Directors disapproved it and advised them to regularly review the loans. However, the management working with Anil Ambani only listened to his instructions and transferred the illegal funds.
Sebi believed it was not the fault of the company, RHFL. Even if it will also be punished for being part of the crime, the higher punishment should go to individuals such as Anil Ambani and his accomplices because they received the loans or transferred them.
Unfortunately, the debtors couldn’t repay their loans, which made RHFL financially unstable. The news went public and 9 lakh shareholders presently lost lots of money due to RHFL’s share price dropping from Rs 59.60 in March 2018 to Rs 0.75 by March 2020.