NEW DELHI: The Securities and Exchange Board of India (SEBI) has levied a fine of Rs 1 crore on Jai Anmol Ambani, the son of businessman Anil Ambani, for not exercising proper due diligence while approving general-purpose corporate loans (GPCLs) in the case of Reliance Home Finance.
Krishnan Gopalakrishnan, the former chief risk officer of Reliance Home Finance, has also been fined Rs 15 lakh for his role in the approval process.
Both of them have been instructed to pay the penalties within 45 days.
“Noticee 1, as Non-Executive director of the company, has taken the company in his own direction and has gone overboard in his role as Director. Noticee 1 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,” SEBI said in its order.
The regulator further noted that Jai Anmol Ambani, who served on the boards of Reliance Capital and Reliance Home Finance and was also a director in other Reliance ADAG group companies where the funds were subsequently lent, “did not exercise reasonable due diligence with respect to the entire GPCL lending and the onward lending by these GPCL entities to other Reliance ADAG group companies, including Reliance Capital Limited.”
SEBI also pointed out that Gopalkrishnan, in his capacity as the chief risk officer, approved various GPCL loans and was aware of significant discrepancies recorded in the credit approval memos of various lendings that he had recommended.
Last month, SEBI imposed a five-year stock market trading ban on Anil Ambani, three key officials of his company, and 23 associated companies. The investigation conducted by SEBI revealed a pattern of financial misconduct orchestrated by Anil Ambani and his associates, involving the diversion of funds under the guise of loans to entities connected to Anil Ambani, resulting in serious violations of financial regulations.
Krishnan Gopalakrishnan, the former chief risk officer of Reliance Home Finance, has also been fined Rs 15 lakh for his role in the approval process.
Both of them have been instructed to pay the penalties within 45 days.
“Noticee 1, as Non-Executive director of the company, has taken the company in his own direction and has gone overboard in his role as Director. Noticee 1 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,” SEBI said in its order.
The regulator further noted that Jai Anmol Ambani, who served on the boards of Reliance Capital and Reliance Home Finance and was also a director in other Reliance ADAG group companies where the funds were subsequently lent, “did not exercise reasonable due diligence with respect to the entire GPCL lending and the onward lending by these GPCL entities to other Reliance ADAG group companies, including Reliance Capital Limited.”
SEBI also pointed out that Gopalkrishnan, in his capacity as the chief risk officer, approved various GPCL loans and was aware of significant discrepancies recorded in the credit approval memos of various lendings that he had recommended.
Last month, SEBI imposed a five-year stock market trading ban on Anil Ambani, three key officials of his company, and 23 associated companies. The investigation conducted by SEBI revealed a pattern of financial misconduct orchestrated by Anil Ambani and his associates, involving the diversion of funds under the guise of loans to entities connected to Anil Ambani, resulting in serious violations of financial regulations.
