SEBI slaps ₹40 cr fine on Reliance Industries & Mukesh Ambani over 2007 share manupulation
Market regulator SEBI has imposed penalties of Rs 25 crore on RIL and Rs 15 crore on Ambani for allegedly manipulating RPL shares in November 2007
The Securities and Exchange Board of India (SEBI) on Friday imposed a hefty fine on Reliance Industries Ltd (RIL) and its Chairman & Managing Director Mukesh Ambani along with two other entities for allegedly manipulating shares of erstwhile Reliance Petroleum Ltd (RPL) in November 2007.
The market regulator has imposed penalties of Rs 25 crore on RIL and Rs 15 crore on Ambani in the RPL shares trading case. Besides, Navi Mumbai SEZ Pvt Ltd has been fined Rs 20 crore and Mumbai SEZ Ltd has been asked to pay Rs 10 crore penalty. The case pertains to sale and purchase of RPL shares in the cash and futures segments in November 2007. RIL decided to sell a 4.1% stake in RPL in March 2007, a listed subsidiary that was later merged with RIL in 2009.
In a 95-page order, SEBI’s Adjudicating Officer BJ Dilip ruled that twelve Agents appointed by Reliance Industries took short positions in the F&O Segment on behalf of RIL, while the industry itself undertook transactions in RPL shares in the cash segment.
The depressed settlement price due to manipulative trades resulted in profits on the said short positions which were then transferred by the agents back to Reliance Industries as per a prior agreement, it ruled.
"In the instant case, the general investors were not aware that the entity behind the above F&O Segment transactions was RIL. The execution of the aforesaid fraudulent trades affected the price of the RPL securities in both Cash and F&O Segments and harmed the interests of other investors," the order said.
SEBI also concluded that Mukesh Ambani as the MD of RIL was responsible for the manipulative activities of RIL. “I am of the view that such acts of manipulation have to be dealt with sternly so as to dissuade manipulative activities in the capital markets,” he said.
SEBI had already directed RIL in 2017 to pay a penalty of Rs. 447.27 crore along with interest at the rate of 12% per annum from November 29, 2007, onwards till the date of payment. Further, RIL was also prohibited from dealing in equity derivatives in the F&O segment of stock exchanges, directly or indirectly, for a period of one year from the date of that order. The current order imposing fine on the entities is in addition to the 2017 order.
Published By : Gloria Methri
Published On: 2 January 2021 at 11:51 IST