Anil Ambani Reliance Infrastructure, Reliance Power, Reliance Home Finance stocks plunge: The group led by industrialist Anil Ambani (Ambani Group) Companies Reliance Home Finance (Reliance Home Finance), Reliance Power (Reliance Power) and Reliance Communications shares hit the lower circuit limit on Monday. The shares of these companies have been falling since market regulator SEBI banned Anil Ambani and 24 others from the securities market for 5 years on charges of misappropriation of funds from Reliance Home Finance Limited.
These shares fell drastically
Shares of Reliance Power fell 4.99 per cent to hit a lower circuit limit of Rs 32.73 on the BSE. Shares of Reliance Home Finance Limited fell 4.93 per cent to Rs 4.24. Shares of Reliance Communications fell 4.92 per cent to hit a lower circuit limit of Rs 2.32. Shares of Reliance Infrastructure also fell 2.90 per cent to Rs 205.55.
Shares of Reliance Infrastructure, Reliance Home Finance and Reliance Power also fell on Friday. It is worth noting that the Securities and Exchange Board of India (SEBI) has banned industrialist Anil Ambani and 24 others, including former top officials of Reliance Home Finance, from the securities market for five years in the case of misappropriation of funds from the company. SEBI has also imposed a fine of Rs 25 crore on Ambani.
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Ambani has also been barred for five years from holding directorship or key managerial position (KMP) in any listed company or any entity registered with the market regulator. Apart from this, a fine ranging from Rs 21 crore to Rs 25 crore has been imposed on 24 entities. Also, the regulator has banned Reliance Home Finance from the securities market for six months and imposed a fine of Rs 6 lakh on it.
In its 222-page order last Thursday, SEBI mentioned the careless attitude of the company’s management and promoter, under which they sanctioned loans worth hundreds of crores of rupees to companies that had neither assets, nor cash flow, ‘net worth’ or revenue. According to the order, this shows that there was a dangerous motive behind the ‘loan’.
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SEBI said that the situation becomes even more suspicious when we consider that many of these borrowers are closely linked to the promoters of RHFL. According to the regulator, ultimately most of these borrowers failed to pay the same, causing RHFL to default on its own debt obligations. This led to the resolution of the company under the Reserve Bank of India (RBI) framework, leaving its public shareholders in a difficult situation.
