Reliance Power hits lower circuit for 3rd session after SEBI bans Anil Ambani from securities market

The ban on Anil Ambani and 24 other entities, including former key officials of Reliance Home Finance, was imposed for allegedly diverting funds from the company.

Shares of Reliance Power and Reliance Home Finance fell to a 5 percent lower circuit for the third consecutive session. The sharp decline comes after market regulator Securities and Exchange Board of India (SEBI), on August 22, banned promoter Anil Ambani from the securities market for five years.

The ban on Ambani and 24 other entities, including former key officials of Reliance Home Finance, was imposed for allegedly diverting funds from the company.

At 10:20 am, Reliance Power shares were trading at Rs 31.11 on the National Stock Exchange (NSE), locked at the lower circuit. Reliance Home Finance was also locked at the lower circuit, trading at Rs 4 on the NSE.

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The Securities and Exchange Board of India (SEBI) imposed a Rs 25 crore penalty on Anil Ambani and banned him from any association with the securities market, including roles as a director or key managerial personnel (KMP) in listed companies or intermediaries registered with the regulator, for five years.

Additionally, SEBI has barred Reliance Home Finance from the securities market for six months and imposed a Rs 6 lakh fine on the company.

In its 222-page final order, the regulator found that Ambani, aided by Reliance Home Finance's key managerial personnel, executed a fraudulent scheme to divert funds from the mortgage lender, disguising them as loans to entities connected to him. Reliance Power has issued a clarification about the regulator's order.

"Reliance Power Ltd was not a notice or party to the proceedings before Sebi in which the Order is passed. No directions are given in the Order against Reliance Power Ltd. Anil Ambani had resigned from the board of directors of Reliance Power Ltd pursuant to the interim order dated February 11, 2022, passed by SEBI in the same proceedings," it said.

Therefore, "the order dated August 22, 2024 passed by the SEBI has no bearing whatsoever on the business and affairs of Reliance Power Ltd," the company added.

Also Read | Reliance Power, other shares fall after SEBI bans Anil Ambani from securities market for five years

In a statement, a spokesperson for Ambani said he had resigned from the boards of Reliance Infrastructure and Reliance Power pursuant to the SEBI interim order dated February 11, 2022.

“Ambani is reviewing the final order dated August 22 passed by SEBI in the matter, and will take appropriate steps as legally advised,” they said. The statement has not led to any slowdown in selling as both stocks have continuously hit the 5 percent lower circuit in all sessions.

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