SAT admits Anil Ambani plea in RHFL case, directs 50% deposit of penalty
Mumbai, Oct 18, 2024
The tribunal has directed Ambani to deposit 50 per cent of the penalty amount and asked Sebi to file a reply in the matter within four weeks
The Securities Appellate Tribunal (SAT) on Friday admitted a plea by Anil Ambani against an order by the Securities and Exchange Board of India (Sebi), in which the market regulator had imposed a penalty of Rs 25 crore and debarred him from the markets for five years in a matter related to Reliance Home Finance (RHFL).
The tribunal has directed Ambani to deposit 50 per cent of the penalty amount and asked Sebi to file a reply in the matter within four weeks.
“There should be no recovery of the penalty amount subject to 50 per cent deposit within four weeks,” said Justice P S Dinesh Kumar.
In an order dated August 22, the market regulator had alleged siphoning off funds from RHFL by doling out loans to borrowers linked with the promoters. Sebi had imposed a total penalty of Rs 625 crore on 26 entities.
While representing Ambani, Senior Advocate Harish Salve argued that the market regulator was overstepping its jurisdiction. “Sebi is a markets regulator, not a corporate affairs regulator,” he argued to the tribunal.
He further added that “not a single rupee” came into the accounts of Ambani, nor was Sebi able to establish that he received any benefits.
Seeking a stay on the order, Salve said that Sebi issued the August 22 order when an interim order in the matter had already been issued two years ago.
The counsel for Sebi argued that “loans worth thousands of crores” were given without following the required credit process from a listed company where shareholders depend on the value of the company. He added that Ambani signed and approved loans that were in violation of court orders.
Further, the Sebi counsel claimed that amounts in the range of Rs 4,000 crore to Rs 8,000 crore had gone to related parties or connected entities.
The matter pertains to general-purpose working capital loans (GPCL) disbursed by RHFL during 2018 and 2019. The regulator found several irregularities, violations, and disclosure lapses at RHFL. The loans extended by RHFL had increased significantly to ~Rs 8,670 crore in 2018-19 from ~Rs 3,742 crore in 2017-18.
As per the Sebi order, the total outstanding amount pending to be received by RHFL stood at Rs 6,931 crore.
[The Business Standard]
