The Securities and Exchange Board of India (SEBI) on Monday (Sept 23) imposed a Rs 1 crore penalty on Jai Anmol Ambani, son of industrialist Anil Ambani, for failing to exercise due diligence in approving General Purpose Corporate Loans (GPCLs) while serving as a non-executive director of Reliance Home Finance Ltd (RHFL).
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Mumbai: The Securities and Exchange Board of India (SEBI) has imposed a Rs 1 crore penalty on Jai Anmol Ambani, son of industrialist Anil Ambani, for failing to exercise due diligence in approving General Purpose Corporate Loans (GPCLs) during his tenure as a non-executive director of Reliance Home Finance Ltd (RHFL).
SEBI’s investigation found that despite holding a non-executive position, Jai Ambani was actively involved in the company’s decision-making process, specifically in approving loans that were eventually extended to promoter-related entities within the broader Reliance ADAG group.
In its order, SEBI detailed how Jai Ambani did not exercise adequate oversight or follow the Listing Obligations and Disclosure Requirements (LODR) Regulations, which mandate directors to act in the best interests of the company and its shareholders.
The order emphasized,
“Noticee 1 (Jai Anmol Ambani), being a non-executive director, has not acted in good faith, with due diligence and care, and in the best interest of RHFL and its shareholders.”
It further stated that he failed to maintain high ethical standards and did not ensure appropriate risk management systems and internal controls were in place.
Key Findings of the Investigation
- Loan Approvals Without Due Diligence: SEBI found multiple instances where Jai Ambani approved unsecured loans of Rs 20 crore each to entities like Visa Capital Partners and Accura Productions Private Limited, despite the Board of Directors previously instructing a halt to further loans. For instance, an email dated May 17, 2018, revealed that Jai Ambani approved a Rs 20 crore loan to Visa Capital Partners with a simple reply, “Okay”. Similarly, on February 14, 2019, despite a Board directive on February 11, 2019, to stop issuing GPCL loans, he approved another Rs 20 crore loan to Accura Productions Private Limited.
- Active Involvement: SEBI’s investigation challenged Jai Ambani’s defense of being a non-executive director. Instead, it highlighted that he was actively involved in day-to-day decisions, including approvals for loans that ultimately benefited promoter-related entities.
For his role, Krishnan Gopalakrishnan, the former Chief Risk Officer of RHFL, was also fined Rs 15 lakh for failing to ensure proper risk management in the loan approvals process.
Broader Implications
This action is part of SEBI’s ongoing scrutiny of financial misconduct in the Reliance ADAG group. Last month, SEBI had barred Anil Ambani and 24 other individuals from the securities market for five years, citing the diversion of funds from Reliance Home Finance. Anil Ambani was also fined Rs 25 crore for his role in this diversion.
SEBI’s Adjudicating Officer Barnali Mukherjee issued the current order, concluding that Jai Anmol Ambani had violated multiple provisions of the SEBI (LODR) Regulations, 2015.
These regulations require board members to act diligently and in the best interest of the company and its shareholders. Both Jai Ambani and Krishnan Gopalakrishnan have been given 45 days to pay their respective fines.
This case underscores the increasing regulatory focus on corporate governance and accountability, especially in high-profile cases involving large corporate entities and family-run businesses.
Click Here to Read Previous Reports on Anil Ambani
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