Anil Ambani Banned from Stock Market for 5 Years: ₹25 Cr Fine Imposed, Shares Drop 14%

The market regulator SEBI has banned industrialist Anil Ambani from the stock market for 5 years due to irregularities in fund management. Additionally, Ambani has been fined ₹25 crore. He is also prohibited from becoming a director in any listed company.

Apart from him, 24 other entities, including former chief officers of Reliance Home Finance (RHFL), have been banned and various penalties have been imposed. Reliance Home Finance has been banned for 6 months and fined ₹6 lakh.

According to the final order issued by SEBI, which spans 222 pages, the investigation revealed that Anil Ambani embezzled funds with the help of RHFL officers. He used the funds himself but pretended that the funds were disbursed as loans.

Four Major Points Related to SEBI’s Order

1. The Board of Directors had instructed to halt such loans and regularly review corporate loans, but the company’s management ignored these directives.
2. SEBI stated that given the circumstances, RHFL should not be held solely responsible; other entities also assisted in the diversion of funds.
3. Anil Ambani has been fined ₹25 crore, Amit Bapna ₹27 crore, Ravindra Sudhalkar ₹26 crore, and Pinkesh R. Shah ₹21 crore.
4. Reliance Unicorn Enterprises, Reliance Exchange Next, and other companies involved in the misuse of funds have been fined ₹25 crore each.

Reliance Infra Shares Fall by Almost 14%, Power Drops 5%

Following SEBI’s ban, Anil Ambani’s companies Reliance Infra, Reliance Home Finance, and Reliance Power have seen a decline. Reliance Infra fell the most by 14%, Reliance Home Finance by 5.12%, and Reliance Power by 5.01%.

Anil Joined Reliance in 1983, Business Declined After the Split

Mukesh Ambani joined Reliance in 1981, and Anil Ambani in 1983. Dhirubhai Ambani passed away in July 2002 without leaving a will. Mukesh Ambani became the chairman of the Reliance Group, and Anil Ambani the managing director. In November 2004, the first public fight between the brothers Mukesh and Anil Ambani surfaced. Dhirubhai Ambani’s wife, Kokilaben, was unhappy with the ongoing family feud, leading to a business split. This division occurred in June 2005, but the decision on which brother would get which company was made by 2006. VK Kamath, the then-chairman of ICICI Bank, also had to intervene in this division. After the split, Mukesh Ambani received businesses like petrochemicals, Reliance Industries, Indian Petrochemicals Corp Limited, Reliance Petroleum, and Reliance Industrial Infrastructure Limited. The younger brother, Anil, owned companies like RCom, Reliance Capital, Reliance Energy, and Reliance Natural Resources. Since then, Mukesh Ambani has reached new heights, but Anil’s mistakes have led to the downfall of his business.