• The regulatory body stated that Ambani did not exercise due diligence and did not maintain high ethical standards.
• Krishnan Gopalakrishnan, Chief Risk Officer of Reliance Housing Finance, was also fined Rs 15 lakh.

In a recent development that has sent shockwaves through India's financial sector, the Securities and Exchange Board of India (SEBI) has imposed a hefty penalty on Anmol Ambani, son of renowned industrialist Anil Ambani. The regulatory body has levied a fine of Rs 1 crore on the young Ambani for his failure to exercise due diligence while approving general-purpose corporate loans in the Reliance Home Finance matter.

Anmol Ambani, who held a position on the board of Reliance Home Finance, was found to have approved general-purpose corporate loans, or GPCL loans, despite explicit instructions from the company's board of directors to refrain from doing so.

The SEBI order, issued on Monday, highlighted a specific instance where Ambani approved a loan of Rs 20 crore to Accura Productions Private Limited on February 14, 2019. This approval was given despite a clear directive from the board of directors in their meeting on February 11, 2019, instructing the management not to issue any further GPCL loans.

SEBI's Justification for the Penalty

The SEBI order stated, The notice 1 (Anmol Ambani), 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.

The regulatory body further noted that Anmol Ambani, who was also on the board of Reliance Capital and a director in other Reliance ADAG group companies where the funds were onward 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.

Additional Penalties and Historical Context

In addition to Anmol Ambani, SEBI also imposed a fine of Rs 15 lakh on Krishnan Gopalakrishnan, who served as the Chief Risk Officer of Reliance Housing Finance. Both Ambani and Gopalakrishnan have been directed to pay the respective amounts within 45 days, as per the SEBI order.

This is not the first time that the Ambani family has faced the wrath of SEBI. In August this year, the regulatory body barred Anil Ambani and 24 others from the securities market for five years in a case pertaining to the diversion of Reliance Home Finance Ltd's funds. A hefty fine of Rs 25 crore was also levied on Anil Ambani.

The recent penalties imposed by SEBI underscore the regulatory body's commitment to maintaining the integrity of India's financial markets. The fines serve as a stern reminder to all market participants that any deviation from due diligence and ethical standards will not be tolerated.

The case also brings to light the importance of corporate governance and the role of board directors in ensuring that companies adhere to regulatory norms and ethical standards. The penalties imposed on Anmol Ambani and Krishnan Gopalakrishnan highlight the personal liability that directors can face for their actions, serving as a cautionary tale for other directors.

The SEBI order is a significant development in the ongoing saga of the Ambani family's financial troubles. It remains to be seen how this will impact the family's business empire and their standing in India's corporate world. As the 45-day deadline for payment of the fines approaches, all eyes will be on Anmol Ambani and Krishnan Gopalakrishnan to see how they respond to this regulatory action.