The Securities Appellate Tribunal (SAT) on Thursday adjourned Reliance Commercial Finance’s hearing, challenging the Securities and Exchange Board of India’s (SEBI) order into the alleged funds diversion at Reliance Housing Finance, to October 22.
The court partly heard the company’s appeal seeking a stay on the markets regulator’s recent order barring the entity from the capital markets for five years and a penalty of Rs 25 crore.
A similar plea of Pinkesh R Shah, former chief financial officer of Reliance Housing Finance, has also been partly heard by the tribunal and is set to be heard next on October 22.
On August 22, SEBI barred Anil Ambani and 24 other entities, including Pinkesh Shah and Reliance Commercial Finance, for orchestrating a fraudulent scheme to divert funds at Reliance Home Finance.
Following several complaints of alleged funds diversion in Reliance Home Finance during FY18-19, SEBI investigated the matter and found that Ambani “is the mastermind behind the fraudulent scheme by preponderance of probability.”
The investigation concluded that key managerial personnel of RFHL, including Anil Ambani, siphoned off funds from the listed company (RHFL) by structuring them as ‘loans’ to credit-unworthy conduit borrowers, and in turn, to onward borrowers, all of whom were found to be ‘promoter-linked entities’.