Sebi fines Jai Anmol Ambani ₹1 crore for loan approvals in Reliance Home Finance case

The Securities and Exchange Board of India has fined Jai Anmol Ambani, son of industrialist Anil Ambani, ₹1 crore for failing to exercise due diligence while approving general purpose corporate loans (GPCLs) in the Reliance Home Finance case. It also imposed a fine of ₹15 lakh on Krishnan Gopalakrishnan, the former chief risk officer of Reliance Home Finance, for his involvement in the approvals.

Both Anmol Ambani and Gopalakrishnan were found to be in violation of Sebi’s listing obligations and disclosure requirements and were directed to pay their fines within 45 days of the order.

Also read: Reliance Infrastructure plans to raise ₹6,000 crore via share sales

In August, Sebi barred Anil Ambani and 24 others from the securities market for five years for diverting Reliance Home Finance Ltd's funds and fined him ₹25 crore.

Anmol Ambani 'disregarded board's directives'

In its order of Monday, Sebi noted that Anmol Ambani, as a board member of Reliance Home Finance, had approved a ₹20 crore GPCL to Accura Productions Private Limited in February 2019. This was despite the explicit disapproval of the rest of the board to not approve any more GPCLs just three days prior.

Sebi said Anmol Ambani acted beyond his role as an executive director and disregarded the board's directives. “Anmol Ambani in doing so, gives a hint of being motivated and definitely not in the interests of the shareholders and has not acted with due care and diligence, and has not maintained high ethical standards,” the order read.

Also read: Reliance Capital to be rebranded under IndusInd after takeover, Hindujas tell NCLT

Sebi noted that Anmol Ambani, as a board member of Reliance Capital Limited and Reliance Home Finance Limited, and director in other Reliance ADAG group companies where funds were lent onward, failed to exercise reasonable due diligence in the GPCL lending process. This included the onward lending of funds by these GPCL entities to other Reliance ADAG group companies, including Reliance Capital Limited.

Gopalakrishnan's role

Sebi said Gopalakrishnan also approved several GPCLs despite knowing of significant discrepancies in credit approval memos. “While being a part of the senior management of RHFL, [Gopalakrishnan] should have followed due process, complied with the code of conduct of the Company, and acted with due care and diligence in performing his duties and acted in good faith, in the interest of all stakeholders of the company,” the order read.