Securities Appellate Tribunal Order
• In the matter of Reliance Industries
Ltd &Ors.
(November 5, 2020)
The Securities Appellate Tribunal (SAT)
has directed
Reliance Industries Ltd (RIL) to make
payment of the
disgorged amount of Rs. 447.27 Crore,
along with simple
interest calculated at the rate of 12%
p.a. with effect from
November 29, 2007 till the actual date of
payment to SEBI
within 60 days from the date of this
Order, while
dismissing an appeal filed by the company
against the
SEBI order dated March 24, 2017.
The core
question raised in the appeal was over the principal-agent model adopted by RIL
and implemented with the help of the other entities. SEBI alleged they had
dumped shares in the last 10 minutes of trading on November 29, 2007, the
settlement day.
This was allegedly with
an intention to artificially depress the price in the cash segment to make
larger gains in futures contracts and was violative of SEBI regulations,
Sebi’s investigation revealed that the
agency agreements separately entered into by RIL with the 12 entities were
identical. These entities opened trading accounts with different brokers
between October and early November 2007. Except for one entity, Dharti Investment
and Holding Pvt. Ltd, the other 11 had no record of experience.
SEBI vide its order dated March 24, 2017
had barred RIL and other entities from dealing in equity derivatives in the
futures and options segment for a period of one year, directly or indirectly,
for allegedly indulging in fraudulent trades in Reliance Petroleum Ltd (RPL) in
2007. SEBI had also directed RIL to disgorge the amount.
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