MUMBAI: Markets regulator Sebi fined Reliance Industries, Mukesh Ambani and two other entities a total of Rs 70 crore on Friday for alleged manipulative trading of the shares of Reliance Petroleum, which merged with RIL in 2009 in a case that was dates back to 2007.
Sebi, in his 95-page order, said in November 2007, RIL and several other entities closely associated with him, traded simultaneously on RPL in the cash and derivatives segments to profit from him.
Sebi imposed a fine of 25 million rupees on RIL, 15 million rupees on Ambani, the president and managing director of the company, 20 crore on Navi Mumbai SEZ and 10 crore on Mumbai SEZ.
The order stated that “any manipulation in the volume or price of securities always erodes investors’ confidence in the market when investors are on the receiving end of market manipulators.”
As of late Friday, RIL had not commented on Sebi’s order. Friday’s regulatory order said that between October and November 2007, “RIL certainly appointed 12 agents” to transact RPL derivatives contracts on its behalf. During November 2007, these 12 agents took short positions in the derivatives segment on behalf of RIL, while the company traded in RPL shares in the cash segment.
“From November 15, 2007 onwards, RIL’s short position in the derivatives segment consistently exceeded the proposed sale of shares in the cash segment. On November 29, 2007, RIL sold a total of 2.25 crore of RPL shares in the cash segment during the last 10 minutes of trading, causing RPL’s share prices to fall, which also reduced the RPL November futures settlement price.
RIL’s entire outstanding position of Rs 7.97 crore in the derivatives segment is settled for cash at this depressed settlement price, generating profits on such short positions. Said profits were transferred by the agents to RIL according to a prior agreement, ”the order said. “An ordinary person related to RIL had placed orders in the cash segment on behalf of RIL and in the derivatives segment on behalf of the agents.”
Financing for the margin payments for the 12 agents was provided by Navi Mumbai SEZ and Mumbai SEZ, it added. Sebi’s warrant also said that being RIL’s CMD, Ambani was “responsible for RIL’s manipulative activities.”
Previously, on March 24, 2017, Sebi had ordered RIL and some of its associated entities to return almost Rs 450 crore plus interest (which could amount to more than Rs 1,000 crore) in the same case.
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