SEBI issues Rs.26 crore fine to Reliance Big Entertainment in RHFL fund diversion case

Anil Ambani’s Reliance Big Entertainment in hot water!

The Securities and Exchange Board of India (SEBI) has slapped a Rs.26 crore penalty on Reliance Big Entertainment for failing to pay fines in connection with a case involving the illegal diversion of funds from Reliance Home Finance Ltd (RHFL).

The company had earlier been fined Rs.25 crore by SEBI in August this year, but failed to clear the dues, prompting the regulator to issue a demand notice for the payment of Rs.26 crore, which includes interest and recovery costs. SEBI has set a 15-day deadline for the payment, warning that if the fine is not cleared within this period, it will take further action, including attaching the company’s assets and bank accounts.

The case stems from allegations of fraudulent fund diversion orchestrated by industrialist Anil Ambani and other key personnel at RHFL. In August, SEBI imposed a five-year ban on Ambani and 24 other individuals and entities involved in the illegal fund transfers. Ambani was also fined Rs.25 crore and barred from holding any positions in the securities market, including roles as a director or key managerial personnel in listed companies, for the same duration.

In its 222-page order, SEBI found that Ambani, aided by RHFL’s senior management, facilitated the diversion of funds from RHFL by misclassifying the transfers as loans to companies linked to him. Despite strong directives from the Board of Directors of RHFL to halt such practices, the management continued to ignore the orders, leading SEBI to highlight significant governance failures within the company.

Apart from Reliance Big Entertainment, SEBI also imposed hefty fines on other entities involved in the scam. Former RHFL executives Amit Bapna, Ravindra Sudhalkar, and Pinkesh R. Shah were fined Rs.27 crore, Rs.26 crore, and Rs.21 crore, respectively. Additional penalties of Rs.25 crore each were imposed on a number of other entities, including Reliance Unicorn Enterprises, Reliance Exchangenext Ltd, and Reliance Commercial Finance Ltd.

SEBI’s action comes as part of its ongoing efforts to curb financial mismanagement and enforce strict corporate governance in the Indian capital markets. The regulator’s warning to Reliance Big Entertainment serves as a reminder to companies about the consequences of non-compliance with financial regulations.

For all the latest updates, download PGurus App.

The post SEBI issues Rs.26 crore fine to Reliance Big Entertainment in RHFL fund diversion case appeared first on PGurus.