The Securities and Exchange Board of India (SEBI) has imposed a five-year ban on Anil Ambani and 24 other entities, barring them from participating in the capital markets. This action prevents Ambani from holding any role within listed companies or registered intermediaries.

The regulatory body took this decision due to allegations of fund diversion from Reliance Home Finance Ltd (RHFL). SEBI has also levied a Rs 25 crore fine on Ambani and prohibited him from engaging in the securities market, including roles as a director or key managerial personnel in any listed entity, or with any market intermediary, for the next five years.

In addition to the fine imposed on Ambani, SEBI has barred Reliance Home Finance Ltd from the securities market for six months and imposed a Rs 6 lakh penalty on the company.

The 222-page SEBI order detailed that Anil Ambani, with the assistance of key managerial personnel (KMPs) at RHFL, orchestrated a scheme to divert funds by masking them as loans to entities connected to him. The regulator found that the Board of Directors of RHFL had issued clear directives to halt these lending practices and conducted regular reviews of corporate loans. Despite these measures, the management continued these practices, indicating a severe governance failure influenced by Ambani.

SEBI’s investigation revealed a fraudulent scheme involving Ambani and the KMPs of RHFL, who diverted funds from the public listed company by structuring them as loans to entities associated with Ambani. These entities, referred to as 'promoter-linked', were deemed credit unworthy.

Among the 24 barred entities are Amit Bapna, Ravindra Sudhalkar, and Pinkesh R. Shah, former key officials of RHFL. SEBI has imposed fines of Rs 27 crore on Bapna, Rs 26 crore on Sudhalkar, and Rs 21 crore on Shah.

Other entities affected by the SEBI order include Reliance Unicorn Enterprises, Reliance Exchange next Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, and Reliance Big Entertainment Private Ltd. Each of these entities faces a Rs 25 crore fine for either receiving illegally obtained loans or acting as intermediaries to facilitate the fund diversion from RHFL.

SEBI’s order highlights the 'cavalier approach' of the company's management and promoter in approving substantial loans to companies with minimal assets, cash flow, net worth, or revenue.