SEBI Imposes Rs 40 Crore Fine On RIL For Manipulative Trades In RPL

• SEBI has imposed a fine of Rs 25 crore on RIL and Rs 15 crore on its Chairman Mukesh Ambani.
• Apart from Reliance Industries, two other companies were also fined for allegedly manipulating trades in RPL.
• The case is related to the manipulation of shares in Reliance Petroleum Ltd. in November 2007.

Stock market regulator Stock Exchange Board Of India (SEBI), On January 1, imposed a fine of Rs 40 crore collectively on RIL and its Chairman Mukesh Ambani. Apart from Reliance Industries, two other companies were also fined for allegedly manipulating trades in Reliance Petroleum Ltd. (RPL).

The board has imposed a fine of Rs 25 crore on Reliance Industries Ltd. and Rs 15 crore on its Chairman Mukesh Ambani. Besides, Navi Mumbai SEZ Pvt. Ltd. has been asked to pay Rs 20 crore while Mumbai SEZ Ltd. has been directed to pay Rs 10 crore.

The case is related to the sale and purchase of Reliance Petroleum shares in the cash and the futures segments in November 2007. This followed RIL's decision in March 2007 to sell a 4.1% stake in RPL, a listed subsidiary that was merged later with RIL in 2009.

SEBI has found that Chairman Mukesh Ambani was responsible for the manipulative trading in RPL. Meanwhile, The regulator has directed to pay the fine within 45 days of the order.

SEBI’s Adjudicating Officer BJ Dilip found that 12 agents appointed by RIL took short positions in the F&O Segment on behalf of RIL, while the company undertook transactions in RPL shares in the cash segment.

"Any kind of 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," the officer said.

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"I note that a Managing director is responsible for managing the day-to-day affairs and business of the company and he has been vested with the said power under the Companies Act, 1956. This implies a high level of accountability and knowledge of the overall functioning of the company".

In this case, The general investors were not told that the entity behind the above F&O segment transactions was Reliance Industries. "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.

While noting that the execution of manipulative trades affects the price discovery system itself, the adjudicating officer BJ Dilip said, "I am of the view that such acts of manipulation have to be dealt sternly so as to dissuade manipulative activities in the capital markets." On March 24, 2017, SEBI had ordered RIL and certain 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.

with PTI inputs (The Press Trust Of India)

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