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Reliance Home Finance, Anil Ambani, and three others barred from securities market by the Sebi.

Sebi barred Reliance Home Finance Ltd, tycoon Anil Ambani, and three other persons from trading in the securities market for allegedly syphoning funds from the firm.

Amit Bapna, Ravindra Sudhakar, and Pinkesh R Shah are the other three persons.

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The regulator also barred the people from associating themselves with any intermediaries listed with Sebi, any listed public business, or acting directors/promoters of any public company which plans to seek money from the public until further orders, in a 100-page interim decision.

The decision was issued against a total of 28 persons and companies for suspected syphoning off of funds from the firm (noticees).

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The Sebi investigation focused on how loans were distributed by Reliance Home Finance Ltd (RHFL) to various borrowing firms during 2018-19.

Sebi stated that the current proceedings arise from a number of sources, including a letter from Price Waterhouse & Co to RHFL informing them of their resignation as the company’s statutory auditor; and grievances received by Sebi alleging syphoning off/diversion of RHFL funds by the company’s promoters and management.

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The regulator stated that there were many Fraud Monitoring Returns (FMRs) from banks stating, among other things, that cash obtained by RHFL from various lenders were partially utilised to repay debts.

The decision further said that different associated persons and corporations with questionable financials were utilised as conduits to drain funds from RHFL to firms linked to the promoter entity Reliance Capital.

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According to the ruling, the amount of loans given by RHFL under General Purpose Corporate Loans (GPC loans) has surged rapidly from about Rs 900 crore on March 31, 2018, to around Rs 7,900 crore on March 31, 2019.

The regulator stated that the prima facie findings contained in the order are based on the record information and that the prima facie observations shall also be viewed as a show-cause notice.

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