On January 2021, SEBI issued an order imposing payment of penalty of Rs. 25,00,00,000 on Reliance Industries Limited; Rs. 15,00,00,000 on Mukesh D. Ambani; Rs. 20,00,00,000 on Navi Mumbai SEZ Private Limited.; Rs. 10,00,00,000 on Mumbai SEZ Ltd. under Section 15HA of the SEBI Act. Non-payment of penalty in 45 days would give effect to recovery proceedings under Section 28A of the SEBI Act for realisation of the amount of the penalty along with the interest by attachment and sale of movable and immovable properties.
The Security and Exchange Board of India conducted an investigation into the trading of Reliance Petroleum Limited, which is Reliance Industries Limited for the period November 1, 2007 to November 29, 2007 to ascertain whether there was any violation of the provisions of SEBI Act and various other rules and regulations made.
An operating plan was approved by the Board of Reliance Industries Limited having resource requirements for two years up to Rs. 87,000 crores. Post this, Reliance Industries Limited decided to sell 5% of its shareholding in Reliance Petroleum Limited.
During the investigations made it was observed that Reliance Petroleum Limited entered into a well-planned operation with the 12 Agents (different companies) to corner the interest upto 93% in Futures and to earn undue profits from the sale of Reliance Petroleum Limited shares in both cash & futures segment. These shares were in the last ten minutes of the settlement day and were dumped in the cash segment resulting in a fall in the settlement price. The Company’s outstanding position of 7.97 crores in F&O (Futures & Options) Segment was settled at this lowered settlement price. This then resulted in profits in short positions which were held by the Agents, these profits were further transferred back to the Reliance Industries Limited as per prior agreement.
Further, Mukesh D. Ambani being the Chairman & Managing Director of the Company was responsible for its day to day affairs and hence liable for manipulative trading.
The scheme resulted in violation of Regulation 3(a), (b), (c), (d) and Regulation 4(1), 4(2)d, (e) of the PFUTP Regulations, 2003 & SEBI Circular no. SMDRP/DC/CIR-10/01 dated November 2, 2001, by both the Company and its Chairman & Managing Director.
It was held that scheme undertaken by the Company with its Agents was deceptive and against the interest of the securities market. The scheme harmed various other investors and was observed to have an adverse impact on the fairness, integrity and transparency of the stock market.
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