Why is the Reliance Industries Ltd (RIL) fined by SEBI?

The Securities and Exchange Board of India (SEBI) has recently imposed a fine of Rs 25 crore on Reliance Industries (RIL) and a fine of Rs 15 crore on the Chairman and Managing Director of the company, Mukesh Ambani. Two other entities Navi Mumbai SEZ Pvt Ltd and Mumbai SEZ Ltd have also been fined.

Key Points

  • This penalty by SEBI has been imposed for a case related to purchasing and sale of Reliance Petroleum Ltd (RPL) shares in the year 2007 in cash and futures segments.
  • RPL was a subsidiary of Reliance Industries and was merged into it in the year 2009.
  • As per the 2007 case, Reliance Industries tried to sell a 4.1% stake of RPL in November 2007 and made a planned operation with its agents to earn profit through the sale.
  • Mumbai SEZ Ltd. and Navi Mumbai SEZ Pvt. Ltd. have been penalized in the same regard. As per the order, both these entities aided and supported Reliance Industries by providing funds to one of its agents during the 2007 sale.
  • A fine of Rs 10 crore has been imposed on Mumbai SEZ Ltd. and Rs 20 crore on Navi Mumbai SEZ Pvt. Ltd.
  • At that time, SEBI directed RIL to pay Rs 447 crore along with 12% annual interest as penalties.
  • Also, RIL was prohibited from dealing in equity derivatives in the futures and options segment of stock exchanges for 1 year.

RILís plea against the SEBIís 2007 order was rejected by the Securities Appellate Tribunal (SAT) in November 2020. RIL said that it would appeal to the Supreme Court in the matter. This recent penalty is in addition to the penalties imposed earlier by SEBI.

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