Shristy Kamal, Pune
In the Reliance Home Finance case, Anmol Ambani, the son of industrialist Anil Ambani was fined ₹1 crore by the Securities and Exchange Board of India (Sebi) on Monday for not exercising due diligence in the approval process of general-purpose corporate loans (GPCLs). Additionally, Reliance Housing Finance’s former chief risk officer Krishnan Gopalakrishnan was fined ₹15 lakh. Sebi has directed both of them to pay the respective amounts within 45 days.
The order comes after an earlier ruling by Sebi in August that banned Anil Ambani and other twenty-four people from the securities market for a period of five years for their involvement in the misappropriation of funds belonging to Reliance Home Finance Ltd. Anil Ambani was also fined ₹25 crore at that time.
Sebi noted in its most recent ruling that Anmol Ambani, a member of the Reliance Home Finance board, had authorized general-purpose corporate loans in defiance of explicit instructions from the board of directors to do so.
On February 14, 2019, Anmol granted Accura Productions Private Limited a ₹20 crore loan despite the board’s decision on February 11, 2019, at a meeting to forgo further GPCL loans. Sebi was critical of Anmol’s conduct saying that by defying the board’s directives he had overreached his authority as a non-executive director.
Indicating a lack of due care, diligence and ethical standards, Sebi stated that his actions seemed motivated and at odds with the interests of the shareholders. Moreover, Anmol neglected to perform due diligence on the whole GPCL lending procedure. Anmol was also a member of the boards of Reliance Capital and Reliance Home Finance. Sebi claims that the money was then improperly lent to other Reliance ADAG group companies such as Reliance Capital.
Additionally, Sebi emphasized on Gopalakrishnan’s role that he had approved multiple GPCL loans in his capacity as Principal Risk Officer. Even though Gopalakrishnan was aware of significant differences in the credit approval memos for these loans he disregarded the company’s code of conduct and the proper procedures. According to Sebi, Anmol Ambani and Krishnan Gopalakrishnan failed to act in the best interests of the company’s stakeholders and broke the Listing Obligations and Disclosure Requirement (LODR) regulations.