Undergoing insolvency and bankruptcy process, Reliance Capital on Wednesday said it cannot ascertain the financial implication of a Sebi order against promoter Anil Ambani and former CFO related to an alleged violation of capital market regulations.
Capital markets regulator Sebi had on February 11 issued an interim order cum showcause notice against Ambani and Amit Bapna, ex-chief financial officer of the company, for alleged violation of provisions of the Sebi Act as well as unfair trade practices.
"Financial implications of the ad interim order cannot be ascertained at this premature stage," Reliance Capital said in a regulatory filing.
Further, it said the company is undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, and it is in the process of seeking legal advice in relation to the same.
The Sebi order restrained Reliance Home Finance Ltd -- a subsidiary of Reliance Capital, industrialist Anil Ambani and three other individuals from the securities market for allegedly siphoning off funds from the company.
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 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.
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.
