Mumbai: The Securities and Exchange Board of India (SEBI) on Friday imposed penalties on Reliance Industries Ltd (RIL), its Chairman and Managing Director Mukesh Ambani, and two SEZs in Maharashtra for alleged manipulative trading in the shares of erstwhile Reliance Petroleum Ltd (RPL) in November 2007.
The market regulator imposed fines of Rs 25 crore and Rs 15 crore on RIL and Ambani, respectively. Besides, it also directed the Navi Mumbai SEZ to pay a penalty of Rs 20 crore, and Mumbai SEZ to pay Rs 10 crore.
Media reported that the case related to sale and purchase of RPL shares in the cash and the futures and options (F&O) segments in November 2007, following RIL’s decision in March 2007 to sell a 4.1 percent stake in its a listed subsidiary (RPL) that was later merged with the parent (RIL) in 2009.
In a 95-page order, SEBI’s Adjudicating Officer B J Dilip said any manipulation in the volume or price of securities always erodes investor confidence in the market when investors find themselves at the receiving end of market manipulators.
“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… fraudulent trades affected the price of the RPL securities in both cash and F&O segments and harmed the interests of other investors,” he said.
Execution of manipulative trades affects the price discovery system itself, the adjudicating officer said, adding “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.”
On March 24, 2017, SEBI had ordered RIL and some other entities to disgorge over Rs 447 crore in the RPL case. In November 2020, the Securities Appellate Tribunal (SAT) dismissed the company’s appeal against the order.
(VP)
