Shares of Reliance Power and Reliance Infrastructure have experienced declines of up to 5% following a significant regulatory action by the Securities and Exchange Board of India (SEBI). SEBI has imposed a five-year ban on industrialist Anil Ambani and 24 other entities, including former officials of Reliance Home Finance Ltd (RHFL), due to their involvement in a major fund diversion scheme.
SEBI’s action also includes a substantial fine of ₹25 crore on Ambani and prohibits him from holding any directorial or managerial positions in listed companies or registered intermediaries for the next five years. The investigation uncovered that Ambani, together with RHFL’s key managerial personnel, orchestrated a scheme to siphon funds from the company. These funds were falsely represented as loans to entities linked to Ambani. Despite repeated directives from RHFL’s Board of Directors to cease such practices, the management failed to comply, revealing significant governance issues.
Reliance Home Finance has been barred from the securities market for six months and fined ₹6 lakh. SEBI’s findings highlighted a fraudulent scheme where loans were provided to entities with dubious financial health, many of which were closely connected to Ambani. These loans went unpaid, leading to RHFL’s default and its subsequent resolution under the RBI Framework.
In the wake of this news, Reliance Infrastructure’s shares fell by 4.93% to ₹224.10, while Reliance Power’s shares decreased by 1.63% to ₹35.71.