SEBI Serves ₹26 Crore Demand Notice to Reliance Big Entertainment for RHFL Fund Diversion Case

The Securities and Exchange Board of India (SEBI) has issued a demand notice to Reliance Big Entertainment for failing to pay penalties in a case related to fund diversion at Reliance Home Finance Ltd (RHFL). 

The notice, served on November 14, 2024, requires the company to pay ₹26 crore, which includes the ₹25 crore fine imposed in August 2024, along with interest and recovery costs. SEBI has set a 15-day deadline for the payment. If the company fails to comply, SEBI has warned that it will attach the company's assets, including bank accounts.

This notice is part of SEBI’s ongoing investigation into financial irregularities at RHFL. Last week, similar demand notices were issued to multiple entities associated with RHFL, including Crest Logistics and Engineers, Netizen Engineering Pvt Ltd, Gamesa Investment Management Pvt Ltd, Vinayak Ventures Pvt Ltd, Deep Industrial Finance Ltd, and Citi Securities and Financial Services Pvt Ltd. Collectively, these entities were directed to pay penalties amounting to ₹154.50 crore.  

The investigation took a major turn in August when SEBI barred industrialist Anil Ambani and 24 other entities from the securities market for five years. SEBI claimed that Mr. Ambani, along with RHFL’s key managerial personnel, set up a scheme to divert funds under the guise of loans. These loans were allegedly directed toward entities linked to Ambani, causing financial instability in RHFL. Despite warnings from the company’s board to stop such practices, the management failed to act.

In a comprehensive 222-page order, SEBI outlined the details of the scheme, describing how funds were systematically diverted. As part of its action, SEBI fined Ambani ₹25 crore and prohibited him from holding any role in listed companies, including positions as a Director or key managerial personnel, for a period of five years.  

SEBI also imposed penalties on other entities within the Reliance group, including Reliance Unicorn Enterprises, Reliance Exchangenext Ltd, Reliance Commercial Finance Ltd, Reliance Cleangen Ltd, Reliance Business Broadcast News Holdings Ltd, and Reliance Big Entertainment. Each of these entities was fined ₹25 crore. Former RHFL officials Amit Bapna, Ravindra Sudhalkar, and Pinkesh R. Shah also received fines ranging from ₹21 crore to ₹27 crore.

Reliance Big Entertainment now faces significant pressure to address the penalties and meet the deadline set by SEBI. Failure to comply could result in severe consequences, including the freezing of assets and bank accounts.