SEBI on Friday imposed a penalty of Rs 13 crore on Reliance Industries Ltd (RIL) for non-disclosure of a key earnings ratio.

Under the listing agreements, companies have to disclose both basic as well as diluted earnings per share (EPS) ratio on results and annual books.

Reliance Industires had in 2007 allotted 12 crore warrants to its promoters entitling its holders to subscribe to equivalent number of equity shares of RIL.

In terms of Clause 41 of the listing agreement, the companies are required to disclose both basic and diluted EPS in the quarterly financial statements filed with Stock Exchanges. "As the RIL had outstanding share warrants issued in April 2007 which got converted into equity shares only during the third quarter of Financial Year 2008-09, the RIL should have disclosed Basic and DEPS in the filings for the quarters ended June 2007, September 2007, December 2007, March 2008, June 2008 and September 2008,' SEBI said.

"However, on scrutiny of the quarterly financial statements of RIL filed with NSE, during the quarter ended June 2007 to September 2008, it was observed that RIL did not disclose separately DEPS in the quarterly financial statements," SEBI said.

A show-cause notice was served on RIL in February last year, listing out allegations levelled against the company.

After looking into the company's reply and further probe into the matter, Sebi said that "EPS (Basic or Diluted) is a vital factor or one of the fundamental tools for the investors while arriving at decision to continue or invest in the shares of a particular company.

The regulator said further that RIL "under an obligation to disclose separately the DEPS for the quarters ended June 2007, September 2007, December 2007, March 2008, June 2008 and September 2008, which the noticee had failed to do so".

"In view of aforesaid observations, facts and records of the case", SEBI said, the company was in violation of the relevant provisions of the Listing Agreement and the SCRA and therefore it was liable to a penalty.

Noting that a specific quantum of any direct or indirect unfair gain made by RIL and the loss caused to the investors were not available on records, the market regulator said that "the fact cannot be ignored that millions of shareholders/investors were deprived of correct disclosures about DEPS."

Accordingly, the regulator has decided to impose a penalty of Rs 1 crore for violation of Listing Agreement and of another Rs 12 crore for violating the SCRA provision.

RIL has been asked to pay the total amount of Rs 13 crore within 45 days

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