The Market Regulator, Security, and Exchange Board of India (SEBI) imposed penalties on Reliance Industries Ltd, it’s Chairman and Managing Director Mukesh Ambani as well as two other entities for alleged manipulative trading in the shares of erstwhile Reliance Petroleum Ltd (RPL) back in November 2007.
The SEBI imposed the fine of Rs.25 crore and Rs.15 crore have been imposed on Reliance Industries Ltd (RIL) and Ambani, respectively. Besides, Navi Mumbai SEZ Pvt. Ltd. has been asked to pay a penalty of Rs.20 crore and Mumbai SEZ Ltd has been imposed on Mumbai SEZ Ltd.
It was observed that RIL had entered into a well-planned operation with its Agents to corner the open interest in the RPL Futures and to earn undue profits from the sale of RPL shares in both cash & futures segments and to dump large number of RPL shares in the cash segment during the last ten minutes of trading on the settlement day resulting in a fall in the settlement price.
It was also observed that Mukesh D. Ambani , being the Chairman & Managing Director of RIL, was responsible for its day-to-day affairs and thereby, liable for the manipulative trading done by RIL.
It was also observed that Navi Mumbai SEZ Pvt. Ltd. and Mumbai SEZ Ltd. have allegedly aided and abetted RIL by providing funds to one of the agents appointed by RIL, who in turn provided funds to other 11 agents for making the margin payments for the short positions in RPL November Futures.
The Adjudicating Officer, B.J.Dilip said that in the event of failure to pay the said amount of penalty within 45 days of the receipt of this Order, recovery proceedings may be initiated under Section 28A of the SEBI Act for the realization of the said amount of penalty along with interest thereon, inter alia, by attachment and sale of movable and immovable properties.
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