Sitting Mukesh Ambani: RPL Case: SAT quashes Sebi order against Mukesh Ambani and 2 others

New Delhi: The Securities Appellate Tribunal (SAT) on Monday dismissed the fine imposed by Sebi on Reliance Industries Ltd Chairman Mukesh Ambani and two others in a case related to alleged manipulative trading of shares of erstwhile Reliance Petroleum Ltd (RPL). The ruling comes after all the companies appealed to the tribunal against the order passed by the Securities and Exchange Board of India (Sebi) in January 2021.

In January 2021, Sebi had fined Reliance Industries Ltd (RIL) a fine of Rs 25 crore, the company’s chairman and managing director Ambani a fine of Rs 15 crore, Navi Mumbai SEZ Pvt Ltd a fine of Rs 20 crore and Mumbai SEZ a fine of Rs 10 crore. imposed. Ltd. in the RPL case.

Both Navi Mumbai SEZ and Mumbai SEZ have been promoted by Anand Jain, who once worked with Reliance Group.

In an 87-page order on Monday, the tribunal set aside Sebi’s orders passed in 2021 against Ambani, Navi Mumbai SEZ and Mumbai SEZ.

The tribunal also directed Sebi to return the fine amount if it had deposited it with the regulator.

The case involved the buying and selling of RPL shares in the cash and futures sectors in November 2007. This follows RIL’s decision in March 2007 to sell around 5% stake in its listed subsidiary RPL, which was later merged with RIL in 2009.

The tribunal said RIL’s board had specifically empowered the two to decide on divestment. The tribunal also noted that the managing director could not be held to be in fact responsible for all of the corporation’s alleged breaches of law.

“In view of the prima facie evidence in the form of minutes of meetings of the two Boards of Directors of RIL which conclusively establish that the transactions in question were carried out by two senior officials without the knowledge of the appellant, no liability can be imposed on Notification No. 2. (Ambani ),” the tribunal said.

Sebi added that Ambani failed to prove that he was involved in the execution of the transactions carried out by the two senior executives.

Regarding RIL, the bench comprising Justice Tarun Agarwala and Chairperson Meera Swarup dismissed the company’s appeal, saying, “We do not find any reason to interfere with the impugned order as far as the RIL company is concerned.”

The order refers to an order passed by Sebi in March 2017, directing RIL and certain other entities to recover over Rs 447 crore in RPL cases. In November 2020, the tribunal dismissed the company’s appeal against the order.

Meanwhile, Sebi, in an order passed in January 2021, said RIL had appointed 12 agents to conduct RPL futures trading in November 2007. These 12 agents took short positions on behalf of the Company in the Futures and Options (F&O) segment, while the Company traded RPL shares in the Cash segment.

Sebi also alleged that RIL violated the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) rules by launching a well-planned operation with appointed agents to earn excessive profits by selling RPL shares both for cash and in cash. F&O division.

Additionally, regulators alleged that the company manipulated the settlement price of the November 2007 RPL futures contract by dumping a large number of RPL shares in the cash segment during the last 10 minutes of trading on November 29, 2007.

The execution of fraudulent transactions affected the prices of RPL securities in both cash and F&O segments and harmed the interests of other investors, Sebi said.

It was alleged that Navi Mumbai SEZ and Mumbai SEZ financed the entire manipulation scheme by funding 12 agencies.