New Delhi: Securities and Exchange Board of India has ordered Indian billionaire Mukesh Ambani and Reliance Industries to pay fines. The Indian regulator has levied penalties on Ambani and Reliance regarding a violation of share-trading rules. The penalties amount to Rs 40 crores, levied against Ambani and Reliance.
SEBI order against Reliance Industries:
The Securities and Exchange Board of India issued an order on January 1st. The market regulator stated that agents under the directions of Reliance Industries had allegedly received undue profits from the sale of Reliance Petroleum Ltd shares.
In March 2007, Reliance Industries had decided to sell its 4.1 percent stake in its subsidiary, Reliance Petroleum.
The SEBI order stated that on November 29, 2007, RIL sold off 1.95 crore shares of Reliance Petroleum. The exchange of shares in the last 10 minutes of trading led to a fall in cash segment prices, according to the order.
The agents in RPL November Futures received undue profits due to the sale of the shares. The profits were transferred to RIL by the agents. The sale of shares ‘has resulted in the manipulation of the settlement price of RPL November Futures and prices of RPL shares in the cash segment.’
Reliance Petroleum was later merged with Reliance Industries in 2009.
The regulator held Mukesh Ambani, the Chairman and Managing Director of Reliance Industries, and Reliance Industries liable for the unfair trading practices.
SEBI officer issues statement:
SEBI Adjudicating Officer, B J Dilip, had stated in the 95-page order issued by SEBI. B J Dilip stated that manipulation in the price of securities erodes investor confidence.
The adjudicating officer stated that ‘such acts of manipulation have to be dealt with sternly to dissuade manipulative activities in the capital markets.’
Fines have been issued up to Rs 40 crores against Ambani and the companies he runs. Mukesh Ambani has been fined Rs 15 crore. Meanwhile, Reliance Industries Ltd has been asked to pay a penalty of Rs 25 crore. Associated entities such as Mumbai SEZ Ltd and Navi Mumbai SEZ Ltd have also been fined. The companies have been fined Rs 10 crore and Rs 20 crore, respectively.