Replied to SEBI notice on RPL share sale: Reliance

PTI New Delhi | Updated on May 10, 2011 Published on May 10, 2011

Acknowledging that SEBI was conducting an investigation into the share sale of erstwhile subsidiary Reliance Petroleum, Mukesh Ambani-led Reliance Industries has said it replied to the market regulator in this matter.

“SEBI has issued a showcause notice in connection with the sale of shares of erstwhile Reliance Petroleum Limited by the company. The company has submitted its reply to the same,” Reliance Industries (RIL) informed shareholders in its Annual Report for the 2010-11 fiscal.

At the same time, RIL has asserted, “There has been no instance of non-compliance by the company on any matter related to capital markets during the last three years and hence no penalties or strictures have been imposed on the company by the stock exchanges or SEBI or any other statutory authority.”

A subsidiary of RIL, Reliance Petroleum Ltd (RPL) was merged with the parent in 2009 and subsequently delisted from the stock market.

The matter related to the alleged breach of insider trading norms in connection with the share sale of the erstwhile RPL in the year 2007 has been hanging fire for many months and RIL’s consent application to settle the probe has been repeatedly rejected by SEBI.

SEBI is said to have sent a ‘show cause notice’ to Reliance Industries, asking why proceedings should not be initiated against the company.

It could not be ascertained whether RIL has made another consent application in the issue through its reply to SEBI.

The first consent appeal was made by RIL in November, 2009, followed by another one in August, 2010, but both were rejected by SEBI as the regulator did not accept the consent fees - the charges for an out-of-court like settlement - offered by RIL.

SEBI is said to have assessed the illegal gains from the alleged insider trading at over Rs 500 crore and had found the offered consent fee too low in these appeals. It could not be ascertained how much the Mukesh Ambani group offered to pay as consent fees.

The matter relates to transactions that occurred way back in 2007 and the investigation was initiated by the SEBI on the basis of anonymous complaints.

SEBI had begun quasi-judicial proceedings against RIL after it found violations of insider trading regulations pursuant to its investigation into the trading pattern of the RPL stock for the period between November 1 and 29, 2007.

SEBI first issued show cause notices to RIL in this matter in May, 2009, while the initial probe began in early 2008.

Interestingly, a SEBI probe culminated in January this year against the Anil Ambani group through consent proceedings in a probe also related to transactions during the year 2007.

Published on May 10, 2011
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