Mukesh Ambani: Why did SEBI impose a fine of Rs 25 crore on Reliance? Then why was the order cancelled? Know details
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Mukesh Ambani vs SEBI: Securities Appellate Tribunal (SAT) Reliance Industries Chairman Mukesh Ambani has got a big relief in a case related to Reliance Petroleum Limited. SEBI had imposed a fine of Rs 25 crore on Ambani and two other companies in the case of alleged manipulation in shares. The Securities Appellate Tribunal (SAT) canceled market regulator SEBI’s order to impose fine on Reliance Industries Chairman Mukesh Ambani and two other companies. This penalty was imposed in November 2007 in a case related to alleged manipulation of shares of erstwhile Reliance Petroleum Limited (RPL). The Securities and Exchange Board of India (SEBI) had ordered the imposition of the fine in January, 2021. In the RPL case, SEBI had imposed a fine of Rs 25 crore on Reliance Industries Limited (RIL), Rs 15 crore on the company’s Chairman and Managing Director Ambani, Rs 20 crore on Navi Mumbai SEZ Private Limited and Rs 10 crore on Mumbai SEZ Limited. The promoters of both the companies falling under the fine – Navi Mumbai SEZ and Mumbai SEZ – are Anand Jain, who was earlier a part of Reliance Group.
SEBI will have to return the fine amount
SAT gave its decision after hearing the appeal filed against the order. In its 87-page order, the tribunal set aside the SEBI order passed against Ambani, Navi Mumbai SEZ and Mumbai SEZ. Along with this, the tribunal told SEBI that if the penalty amount has been deposited then it should return it. The case pertains to buying and selling of RPL shares in cash and futures segment in November, 2007. Earlier in March 2007, RIL had decided to sell about five percent stake in its subsidiary RPL. This subsidiary was merged into RIL in the year 2009. SAT said that the board of directors of RIL had specifically authorized two people to take the decision on this disinvestment. Apart from this, it cannot be said that the Managing Director is actually responsible for every legal violation of the companies. The Appellate Tribunal, in its decision, said that concrete evidence gleaned from the minutes of two meetings of the board of directors of RIL proved that the controversial deals had been entered into by two senior officials without the knowledge of the appellant. In such a situation, there is no accountability on Ambani.
what was the allegation
According to the tribunal, SEBI also failed to prove that Ambani was involved in the share transactions done by two senior officials of the company. The regulator had alleged that the company had manipulated the settlement price of the November 2007 RPL futures contract by dumping a large number of RPL shares in the cash segment in the last 10 minutes of trading on November 29, 2007. SEBI had said that the fraudulent deals had affected the price of RPL shares in both cash and futures contracts segments and had hurt the interests of other investors. It was alleged that Navi Mumbai SEZ and Mumbai SEZ had provided funds for misappropriation by financing 12 institutions.
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