Sebi lets off RPIL in the IPCL case
Mukesh Ambani-led Reliance Industries Ltd (RIL) group's Reliance Petroinvestments Ltd (RPIL) got respite as markets regulator Securities and Exchange Board of India (Sebi) let it off in the IPCL insider case. Sebi in its order said that the entities under investigation were indeed associated parties; however, they couldn't conclude that Reliance Petroinvestments and its parent firm RIL were "insider" because of 'lack of evidence'.
Sebi says RPIL trespassed insider trade regulations with IPCL
In 2007, market regulator Sebi ordered an investigation alleging that the former Reliance Petro had profited by trading in shares of Indian Petrochemicals Corporation (IPCL) before it had proclaimed about an interim dividend payment and a plan to amalgamate with RIL. Sebi said RPIL was guilty of infringing the insider trading regulations. Sebi had estimated RPIL's profits of over Rs.3.82 crore through these trades.
Before being sold to RIL group in a disinvestment exercise, IPCL originally used to be a government-owned entity.
Rs.11 crore fine slapped on RPIL by Sebi
Sebi imposed a fine of Rs.11 crore on Reliance Petroinvestments Ltd in the IPCL case. The regulator gave 45 days to RPIL to pay the penalty. Sebi said its investigations showed that RPIL had control over IPCL as "promoter having control over the company with the total shareholding of approximately 46 per cent". RIL was further shown as 'person(s) acting in concert' with RPIL.
Purchase of 21,32,953 shares violated regulations
Sebi had claimed that 21,32,953 shares of IPCL purchased by RPIL for over Rs.55 crore during the period from 27 February 2007 - 2 March 2007 was in breach of insider trading regulations.
SAT quashes Sebi's 2013 verdict
The Securities Appellate Tribunal (SAT) overturned Sebi's penalty verdict on Reliance Industries. SAT asked the regulator to look afresh into the insider trading case and pass another order within 3 months. SAT said that the Sebi order was "passed merely on the basis of presumption without considering the arguments advanced on behalf of the Appellant to rebut the presumption".