Reliance Industries, Mukesh Ambani, Two More Entities Penalized by SEBI
The Securities and Exchange Board of India (Sebi) has imposed a fine of Rs 25 crore on Reliance Industries Ltd (RIL), 15 crores on its chairman and managing director Mukesh Ambani along with two other entities for their purported role in conducting manipulative trades in Reliance Petroleum Ltd (RPL NSE 0.00 %) in the year 2007.
Although RIL hasn’t responded yet to the queries but has challenged an earlier Sebi order in the Supreme Court. Sebi points out the manipulation during the sale and purchase of Reliance Petroleum Limited shares in the cash and the futures segments in Nov 2007. Therefore RIL made a decision in March 2007 to sell a 4.1 percent stake in RPL which was a listed subsidiary that later merged with RIL in 2009.
Mukesh Ambani is the Managing Director of RIL , was held responsible for the manipulative activities carried out in RIL. The order stated that "I am of the view that Noticee-2(Ambani), being the Managing Director of the RIL, cannot absolve himself and plead ignorance about the entire scheme of manipulative transactions undertaken for the benefit of RIL in the shares of RPL in the Cash and F&O Segment. Therefore, I find that Noticee-2(Ambani) was liable for the actions of RIL resulting in violations of PFUTP Regulations, 2003 and SEBI Circular. Therefore, I find that Noticee-2 has violated the provisions of Regulations 3(a), (b), (c), (d) and Regulations 4(1), 4(2) (d), (e) of PFUTP Regulations, 2003 and SEBI Circular no. SMDRP/DC/CIR-10/01 dated November 02, 2001", observed the Adjudicating Officer BJ Dilip in a 95-page order.
"I note that a Managing director is responsible for managing the day-to-day affairs and business of the company and he has been vested with the said power under the Companies Act, 1956. This implies a high level of accountability and knowledge of the overall functioning of the company", he further added.