SEBI fines Mukesh Ambani, Reliance Rs 40 crore

Mumbai: India’s market regulator Securities Exchange Board of India on Friday imposed a fine of Rs 25 crore on Reliance Industries and Rs 15 crore on its chairman, Mukesh Ambani, for manipulating shares of Reliance Petroleum Ltd (RPL) about 13 years ago.

The Securities and Exchange Board of India reported in its order dated Jan. 1 that Reliance and its agents were operating to allegedly gain undue profits from the selling of shares in Reliance Petroleum Ltd., a former unit, both in the cash and futures markets. 250 million rupees must be paid by Reliance Industries and Ambani, the chairman, is responsible for the alleged manipulative trade, Sebi said.

A Reliance spokesman said he couldn’t comment on the order right away.

SEBI has noted that any manipulation of the volume or price of securities often erodes the faith of investors in the market when investors are at the receiving end of the manipulators of the market.

After years of inquiry, SEBI noted in 2017 that Reliance carried out illegal transactions in Reliance Petroleum’s shares along with 12 unlisted trading houses. Between March and November 2007, they purchased stock, and then the company took short positions in November futures before beginning to sell the stock in order to drive down the price, betting that the share price will fall, according to SEBI.

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The same year, the regulator also told companies to return 4.47 billion rupee gains plus interest and barred Reliance for a year from trading futures and options on India’s stock markets. Reliance appealed the order claiming that “unjustifiable penalties” were levied on actual transactions carried out in the interests of shareholders.

In 2009, Reliance Petroleum combined with Reliance Industries. The petroleum entity was an Ambani-owned subsidiary and owned a 580,000 barrel-a-day refinery in the special economic zone of Jamnagar, in the western Indian state of Gujarat, where the group has the largest petrochemical and refining complex in the world.