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SEBI names RIL in insider trading

Regulator rejects firm’s request for financial settlement in a 2007 case, RIL challenges order, HT reports.
Hindustan Times | By HT Correspondent, Mumbai
UPDATED ON JAN 04, 2013 11:16 PM IST

Market regulator Securities and Exchange Board of India (SEBI) has rejected Reliance Industries Ltd’s consent plea in the alleged insider trading case. A consent order refers to an order settling administrative or civil proceedings between the regulator and the firm alleged to have violated a law.

The consent plea was regarding the allegations of insider trading in the erstwhile Reliance Petroleum Ltd. SEBI has said that the entities allegedly violated certain norms on prohibition of fraudulent and unfair trade practices. SEBI rejected RIL’s consent pleas on two occasions earlier too.

RIL has approached the Securities Appellate Tribunal (SAT) against SEBI and its application was earlier scheduled to be heard on Friday. However, SAT has deferred the matter to January 11 for hearing.

SEBI has named 149 other entities along with RIL, whose consent applications were rejected. SEBI said that the consent applications of 12 more entities were rejected in the same insider trading case. RIL refused to comment.

Reliance had requested to settle a long-pending dispute over its 2007 sale of stock futures in a unit citing rule changes in late May that took a tougher stance on alleged violations. The dispute with Reliance stems from SEBI’s investigation into suspected insider trading when the energy conglomerate sold stock futures of Reliance Petroleum before folding the unit into its operations in 2007. RIL has denied engaging in any insider trading in that transaction. SEBI amended its procedures for so-called consent applications or requests for out-of-court settlements in May 2012 effectively banning use of monetary payments to resolve suspected cases of market violations including insider trading.

Consent applications of GMR Holdings Pvt Ltd, Edserve Softsystems Ltd, PMJ Properties, Garuda Plant Products Ltd and EPC Industries Ltd were also rejected by the market regulator. SEBI said these rejected applications are related to alleged violations of ‘Prohibition of Insider Trading Regulations’, ‘Substantial Acquisition of Shares and Takeovers’ and ‘Stockbrokers and Sub-brokers’ norms.

Besides, there are three applications related to alleged violation of ‘Prohibition of Insider Trading Regulations’ in the matter of another erstwhile RIL group company - Indian Petrochemicals Corporation Ltd (IPCL) - which used to be a government-owned company and was later acquired by Mukesh Ambani-led group as part of a disinvestment by the government. Both firms, Reliance Petroleum and IPCL, used to be separately listed entities, but were later acquired by RIL and got de-listed from the stock exchanges.

(with inputs from agencies)

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