Fraudulent Scheme Unveiled: Promoter and Executives Divert Funds, Mislead Board, Trigger Market Penalties and Shareholder Losses.

A public listed company (RHFL) was involved in siphoning off funds by structuring them as 'loans' to creditworthy conduit borrowers, resulting in disproportionate lending and moving funds to non-descript, financially weak privately held companies connected with the Reliance ADA group. Adequate disclosures were not made to public shareholders, violating securities laws. The fraud involved a complete breakdown of governance orchestrated by the promoter (Noticee No. 2 - Anil Ambani) and aided by key managerial personnel (KMPs). The KMPs (Noticees 3-5) played an active role, defying board directives and making false disclosures. Most borrower accounts turned NPAs, leading to RHFL defaulting on payments and resolution under RBI framework, severe..... .....

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