Sebi bars Reliance Home Finance, Anil Ambani, 3 others from securities market
New Delhi, Feb 12: Sebi on Friday restrained Reliance Home Finance Ltd, industrialist Anil Ambani and three other individuals from the securities market for allegedly siphoning off funds from the company.
The three other individuals are Amit Bapna, Ravindra Sudhakar and Pinkesh R Shah.
In a 100-page interim order, the regulator also restrained the individuals from "associating themselves with any intermediary registered with Sebi, any listed public company or acting directors/ promoters of any public company which intends to raise money from the public till further orders."
The order, pertaining to alleged siphoning off of funds from the company, has been passed against a total of 28 individuals and entities (noticees).
The focus of the Sebi probe was to broadly look into the manner in which loans were dispersed by Reliance Home Finance Ltd (RHFL) during 2018-19 to several borrowing entities.
Sebi noted that the root of the present proceedings can be traced to multiple sources, inter alia, a letter of Price Waterhouse & Co addressed to RHFL intimating their resignation as the statutory auditor of the company; and complaints received by Sebi alleging siphoning off/diversion of funds of RHFL by promoters and management of the company.
There were multiple Fraud Monitoring Returns (FMRs) from banks alleging, among others, that funds borrowed by RHFL from different lenders were partly used towards repayment of loans, the regulator said.
It was also complained that various connected parties and companies with weak financials were used as conduits to siphon off funds from RHFL to entities connected to the promoter company Reliance Capital, the order said.
"It is noted that one individual person Anil Ambani, who controls the company due to his position as a promoter and controlling shareholder by way his direct and indirect shareholding, is seen to be exercising unfettered powers...," Sebi said.
The order noted that the company's Key Managerial Persons (KMPs) like Executive Director and CEO Ravindra Sudhalkar and the CFOs -- Amit Bapna and Pinkesh R Shah -- "instead of bringing such misdeeds to the notice of the Board of Directors/Regulators, are prima facie found to be hand in gloves with Ambani, in siphoning off the borrowed funds of the company to other financially weak promoter group companies which is evident at different stages of approval of those General Purpose Corporate Loans (GPCL) transactions".
The amount of loans disbursed by RHFL under General Purpose Corporate Loans (GPC loans) have increased exponentially from around Rs 900 crore as on March 31, 2018 to around Rs 7,900 crore as on March 31, 2019, the order said.
The noticees include Adhar Project Management and Consultancy Private Ltd, Indian Agri Services Pvt Ltd, Phi Management Solutions Pvt Ltd, Arion Movie Productions Pvt Ltd, Citi Securities and Financial Services Pvt Ltd, Deep Industrial Finance Ltd, Azalia Distribution Pvt Ltd and Vinayak Ventures Pvt Ltd.
Gamesa Investment Management Pvt Ltd, Medybiz Pvt Ltd, Hirma Power Ltd, Tulip Advisors Pvt Ltd, Mohanbir Hi-Tech Build Pvt Ltd, Netizen Engineering Pvt Ltd and Crest Logistics and Engineers Pvt Ltd (now known as Cle Pvt Ltd) are among the noticees.
Other noticees are Reliance Unicorn Enterprises Pvt Ltd, Reliance Exchange next Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, Reliance Broadcast Network Ltd, Reliance Big Entertainment Pvt Ltd and Reliance Capital Ltd.
The regulator noted that the prima facie observations contained in the order are made on the basis of the material available on record and the prima facie findings shall also be considered as a show cause notice.
"The noticees (noticee nos. 1 to 28) are further called upon to show cause as to why inquiry should not be held against them... (for) alleged violations of provisions of Sebi Act, 1992, LODR Regulations and PFUTP Regulations," Sebi said, adding that the noticees can file their replies within 21 days of receiving the order.
They can also indicate whether they desire to avail an opportunity of personal hearing on a date and time to be fixed in that regard.
Sebi also clarified that the restraint imposed on RHFL should not come in the way of any resolution/revival plan approved or to be approved, under any law.
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MP HC sets up judicial commission to probe water contamination in Indore
Indore (PTI): The Indore bench of Madhya Pradesh High Court on Tuesday set up a commission of inquiry comprising a former HC judge to probe the issue of water contamination in city's Bhagirathpura, saying the matter requires probe by an independent, credible authority and "urgent judicial scrutiny".
It also directed the commission to submit an interim report after four weeks from the date of commencement of proceedings.
A division bench of Justices Vijay Kumar Shukla and Alok Awasthi constituted the commission while hearing several public interest litigations (PILs) filed simultaneously regarding the deaths of several people in Bhagirathpura due to the consumption of contaminated water.
The HC reserved the order after hearing all the parties during the day, and released it late at night.
The state government on Tuesday told the HC that the deaths of 16 people in Indore's Bhagirathpura area was possibly linked to a month-long outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The government presented an audit report of 23 deaths from the current gastroenteritis epidemic in Bhagirathpura before the bench, suggesting that 16 of these fatalities may have been linked to the outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The report, prepared by a committee of five experts from the city's Government Mahatma Gandhi Memorial Medical College, stated that the deaths of four people in Bhagirathpura were unrelated to the outbreak, while no conclusion could be reached regarding the cause of death of three other people in the area.
During the hearing, the high court sought to know from the state government the scientific basis behind its report.
The division bench also expressed surprise at the state government's use of the term "verbal autopsy" in relation to the report, sarcastically stating that it had heard the term for the first time.
The HC expressed concern over the Bhagirathpura case, stating that the situation was "alarming," and noted that cases of people falling ill due to contaminated drinking water have also been reported in Mhow, near Indore.
In its order, the HC said the serious issue concerning contamination of the drinking water supply in Bhagirathpura area allegedly resulted in widespread health hazards to residents, including children and elderly persons.
According to the petitioners and media reports, death toll is about 30 till today, but the report depicts only 16 without any basis or record, it said.
It is averred that sewage mixing, leakage in the pipeline, and failure of civic authorities to maintain potable water standards have led to the outbreak of water-borne diseases. Photographs, medical reports, and complaints submitted to the authorities prima facie indicate a matter requiring urgent judicial scrutiny, the HC said.
"Considering the gravity of the allegation and affecting the right to life under Article 21 of the Constitution of India and the need for an independent fact-finding exercise, the Court is of the opinion that the matter requires investigation by an independent, credible authority," it said.
"Accordingly, we appoint Justice Sushil Kumar Gupta, former judge of the Madhya Pradesh High Court, a one-man commission of inquiry into the issues relating to water contamination in Bhagirathpura, Indore, and its impact on other areas of the city," the HC added.
As per the order, the commission shall inquire into and submit a report on the cause of contamination -- whether the drinking water supplied to Bhagirathpura was contaminated; and the source and nature of contamination (sewage ingress, industrial discharge, pipeline damage etc).
The panel will also probe the number of actual deaths of affected residents on account of contaminated water; find out the nature of disease reported and adequacy of medical response and preventive measures; suggest immediate steps required to ensure safe drinking water as well as long-term infrastructural and monitoring reforms.
It will also identify and fix responsibility upon the officers and officials found prima facie responsible for the Bhagirathpura water contamination incident, and suggest guidelines for compensation to affected residents, particularly vulnerable sections.
The commission shall have powers of a civil court for the purpose of summoning officials and witnesses; calling up records from the government department, hospitals, laboratories and civic bodies; ordering water quality testing through accredited laboratories; conducting spot inspections.
All state authorities involving district administration, Indore Municipal Corporation, public health engineering department and Madhya Pradesh Pollution Control Board shall extend full co-operation and provide records as sought by the commission, it said.
The state government shall provide office space, staff, and logistical support to the commission, it said.
During the hearing in the day, the state government also presented a status report to the court in this matter.
According to reports, a total of 454 patients were admitted to local hospitals during the vomiting and diarrhea outbreak, of whom 441 have been discharged after treatment, and 11 are currently hospitalised.
According to officials, due to a leak in the municipal drinking water pipeline in Bhagirathpura, sewage from a toilet was also mixed in the water.
