The Securities Appellate Tribunal (SAT) set aside the penalty imposed by Securities and Exchange Board of India (Sebi) on Reliance Industries’s (RIL) chairman Mukesh Ambani and two other entities in a case related to alleged manipulative trading in the shares of erstwhile Reliance Petroleum (RPL) in November 2007. The ruling has come after all the entities appealed before the tribunal against the order passed by Sebi in January 2021.
In January 2021, Sebi imposed a £2.5 million fine on RIL, £1.5 million on Ambani, £2 million on Navi Mumbai SEZ and £1 million on Mumbai SEZ in RPL case. Both Navi Mumbai SEZ and Mumbai SEZ are promoted by Anand Jain, who once served in the Reliance Group.
In its order, the tribunal quashed Sebi’s order against Ambani, Navi Mumbai SEZ and Mumbai SEZ. The tribunal also directed the Sebi to return the fine amount in case it has been deposited by them with the regulator. The case pertains to sale and purchase of RPL shares in the cash and the futures segments in November 2007. This followed RIL’s decision in March 2007 to sell around 5% stake in RPL, a listed subsidiary that was later merged with RIL in 2009. The tribunal said RIL’s board had specifically authorised two persons to decide the disinvestment.
Further, the tribunal noted that it cannot be suggested that the managing director is ipso facto responsible for every alleged contravention of law by the corporate entities.