India’s SEBI Bans Anil Ambani and 24 Others for 5 Years Over Fund Diversion Charges

India’s Securities and Exchange Board (SEBI) has banned Anil Ambani, a prominent Indian businessman, along with 24 others, from the securities market for five years, citing charges of fund diversion. SEBI also imposed a fine of 250 million rupees (approximately $3 million) on Ambani, accusing him of orchestrating a scheme to “siphon off” funds from Reliance Home Finance, a listed subsidiary of Reliance Group, where he serves as chairman.

The ban restricts Ambani and the others from accessing the securities market, including buying, selling, or dealing in securities, either directly or indirectly. SEBI described the scheme as “fraudulent,” stating that it involved structuring loans to credit-unworthy borrowers linked to “promoters” – significant shareholders with influence over company decisions.

SEBI’s investigation revealed that over 90 billion rupees worth of loans from Reliance Home Finance were issued to borrowers with no demonstrable financial ability to repay, and more than 50 billion rupees were granted to entities connected to Reliance Group promoters.

SEBI condemned the situation as a “complete breakdown of governance” within Reliance Home Finance, allegedly orchestrated by Ambani and aided by the company’s management. The 24 others banned include executives from Reliance Group and affiliated unlisted companies.

Shares of Reliance Home Finance fell by 5%, while Reliance Infrastructure and Reliance Power shares dropped nearly 13% and 5%, respectively, following the announcement. A spokesperson for Reliance Group has not yet responded to the allegations.