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SEBI imposes penalty of Rs 11 crore on RIL’s subsidiary in insider trading case

03 May 2013 Evaluate

The Securities and Exchange Board of India (SEBI) has imposed a penalty of Rs 11 crore on Mukesh Ambani-led Reliance Industries’ subsidiary - Reliance Petroinvestments, after finding the company guilty of insider trading case that dates back to 2007. This penalty is required to be paid by the company within 45 days to the account of 'SEBI-Penalties Remittable to Government of India.’

Reliance Petroinvestments (RPIL) was found to be guilty of violating the insider trading regulations with regard to its dealings in shares of Indian Petrochemicals Corp (IPCL) in early 2007, a company that RIL had acquired and in which RPIL held a controlling stake, resulting into a gain of Rs 3.82 crore.

In the year 2007, the RIL’s arm bought about 2.13 million shares of IPCL at an average price of Rs 259.42 per share for Rs 55.5 crore just prior to the two big announcements, pertaining to IPCL’s amalgamation with RIL and regarding a dividend that IPCL was to announce, thereby underscoring that the company had clear access to this information being an insider. Reliance Petroinvestments was listed as a ‘promoter having control over the company’ and Reliance Industries as a ‘person(s) acting in concert’, according to disclosures made by IPCL.

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