Why Did SEBI Take Such A Major Action Against Anil Ambani? What Is The Diversion Of Funds That Has Ruined Him?

Anil Ambani has been banned by market regulator SEBI for 5 years. The 22-page order makes numerous allegations against Anil Ambani and his company. The biggest role in this is the improper diversion of funds. After all, what is diversion of funds? The board of directors of RHFL had given strict instructions to stop such lending practices and had regularly scrutinized corporate loans, but the company management ignored these orders. The consequences of which had to be paid in the form of a ban.

What did SEBI say in the order?

SEBI has said in its order that Anil Ambani, with the help of key management personnel of RHFL, had devised a fraudulent scheme to withdraw funds from RHFL, which he had concealed in the form of loans to institutions associated with him. Though the board of directors of RHFL had given strict instructions to stop such lending practices and had periodically scrutinised corporate borrowings, the company management ignored these orders. This shows that there is a significant failure in governance, which has been carried out under the influence of Anil Ambani.

Let us tell you that the market regulator SEBI has also imposed a fine of Rs 6 lakh on Anil Ambani’s company Reliance Home Finance and this company has been banned for 6 months. Seven SEBI has banned Anil Ambani for 5 years. 24 entities have also been banned including Anil. SEBI has banned all of them from the stock market. In addition to this, SEBI has also imposed a fine of Rs 25 crore. Following this ban, Anil Ambani will no longer be able to participate in the stock market.

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What is misappropriation of funds?

Diversion of funds in the stock market means using company funds without official permission for other purposes which have no relation to that company. In the case of Anil Ambani, under his leadership a plan was hatched with the help of the management to withdraw funds from RHFL which was against the rules. The rule says that if company funds are used for any work which has nothing to do with the future of that company then permission should be taken from the board of directors and written orders should be issued from the decision maker of the company. In this case, regarding this fraud, the director of the company had also issued an order not to do so.

To what extent will the action be affected?

Let us tell you that as soon as the news from SEBI came, a huge fall was recorded in Anil Ambani’s company Reliance Power. At 12 noon, the shares of Reliance Power fell by more than 5 percent. There was a sharp rise in the shares of Reliance Power for the last 3 days. As soon as the news from SEBI came, it was a blast. Now the lower circuit has been installed in it. Experts predict that this decline can be seen in the future as well. With this order, the market capitalization of Anil Ambani’s three companies has been reduced by Rs 2,126 crore.