MUMBAI: Mukesh Ambani-led Reliance Industries Ltd. was slapped with a record fine and barred from trading in equity derivatives on the futures and options (F&O) market for one year by market regulator Sebi for “fraudulent and manipulative” trades.
The result of an investigation into trades made in Reliance Petroleum Ltd stock in 2007, the fine imposed (Rs 447.27 crore plus 12 per cent interest per annum calculated from November 29, 2007) is likely to be the largest in Sebi’s history — approaching a total of as much as Rs 1,300 crore and a minimum of Rs 947 crore.
The ban on trading has also been extended to twelve other entities involved in the fraudulent trades as agents of RIL. According to Sebi, RIL had sold a 4.1 per cent stake in RPL in 2007 ahead of a planned amalgamation. However, the shares had been sold first in the futures market and later in the spot market, to prevent a slump in RPL share prices.
RIL has been found guilty of using agents to book positions in the futures market ahead of the sale in the spot market, to make “unlawful gains” to the tune of Rs 513 crore.
According to the order, the fine and ban has been imposed taking into account both “the magnitude of the fraud across markets and the quantum of unlawful gains” made by Reliance Industries. These gains “could not have been made but for the fraudulent and manipulative strategy/pattern adopted by them,” it stated. A company spokesperson said they would contest the ruling at the Tribunal.