Sebi issues Rs 129 crore demand notices to RHFL, 5 others in illegal fund diversion case

Capital markets regulator Sebi has asked six entities, including Reliance Home Finance Ltd (RHFL) and former company officials, to pay Rs 129 crore for the illegal diversion of funds from the firm. The regulator has warned these entities to attach assets and bank accounts if they fail to make the payment within 15 days.

Sebi sent notices to Reliance Home Finance, Ravindra Sudhalkar, Amit Bapna, Pinkesh Shah, Phi Management Solutions Pvt Ltd and Adhar Project Management and Consultancy Pvt Ltd in the case.

The demand notices came after these entities failed to pay the fine imposed on them by the Securities and Exchange Board of India (Sebi) in August this year.

In six separate notices, Sebi directed these six entities to pay the amount in the range of Rs 6.25 lakh to Rs 28.08 crore, which includes interest and recovery costs within 15 days.

In the event of non-payment of dues, the market regulator will recover the amount by attaching and selling the moveable and immovable property of these entities. Besides, they will face attachment of their bank accounts as well as detention in prison.

On Monday, Sebi asked five entities to pay Rs 130 crore for the illegal diversion of funds from Reliance Home Finance Ltd.

The regulator on Monday sent notices to Netizen Engineering, Gamesa Investment Management, Vinayak Ventures, Deep Industrial Finance and Citi Securities and Financial Services.

Prior to that, last week, the markets watchdog issued demand notices to six entities, including RHFL's promoter entity Crest Logistics and Engineers (now known as CLE Pvt Ltd), and asked them to pay Rs 154.50 crore for diversion of funds from RHFL.

In August this year, Sebi barred industrialist Anil Ambani and 24 others from the securities market for five years on charges of diversion of funds from RHFL.

Additionally, Sebi has imposed a penalty of Rs 25 crore on Ambani and restrained him from serving as a director or Key Managerial Personnel (KMP) in any listed company entity for five years.

Besides, a fine ranging from Rs 21 crore to Rs 25 crore has been levied on 24 entities. Also, the regulator barred RHFL from the market for six months and slapped a fine of Rs 6 lakh on it.

In its probe, Sebi found that Anil Ambani, with the help of RHFL's KMPs -- Amit Bapna, Ravindra Sudhalkar and Pinkesh R Shah -- have orchestrated a fraudulent scheme to "siphon off" funds from RHFL by disguising them as loans to entities linked to him.

Further, the remaining entities have played the role of being either recipients of illegally obtained loans or conduits to enable the illegal diversion of money from RHFL.

Ambani had used his position as 'chairperson of the ADA group' and his significant indirect shareholding in the holding company of RHFL to orchestrate the fraud.

Accordingly, Sebi has barred these 25 entities including Ambani and former officials from the securities market for five years.

Ambani and three former officials of RHFL (Bapna, Sudhalkar and Shah) have been restrained from being associated with the securities market including as a director or KMP in any listed company for five years.

The regulator also levied a fine of Rs 27 crore on Bapna, Rs 26 crore on Sudhalkar and Rs 21 crore on Shah.