SEBI Slaps Rs 40 Crore Fine On Reliance For Manipulative Trades

A fine of Rs 25 crore on Reliance Industries and Rs 15 crore on its chairman, Mukesh Ambani, has been imposed by the Securities Exchange Board of India (SEBI) on Friday for manipulating shares of Reliance Petroleum Ltd (RPL) in November 2007.

SEBI stated that Reliance and its agents operated to allegedly earn undue profits from the sale of shares in Reliance Petroleum Ltd in both the cash and futures markets. It concluded that the Managing Director of Reliance Industries Ltd (RIL) Mukesh Ambani was responsible for the manipulative activities.

As per reports, a total of 12 agents appointed by RIL took short positions in the F&O Segment on behalf of RIL, while RIL on the other hand undertook transactions in RPL shares in the cash segment. Throughout the month of November in 2007, various transactions were undertaken by RIL in the cash segment and through the agents in the F&O segment which resulted in RIL's short position in the F&O segment to constantly exceed the proposed sale of shares in the cash segment.

By the end of month, RIL sold a total of Rs 2.25 crore shares in the cash segment during the last 10 minutes of trading resulting in fall of prices of RPL shares, which also lowered the settlement price of RPL November Futures in the F&O segment.

Additionally, the Navi Mumbai SEZ Pvt Ltd and Mumbai SEZ Ltd have also been asked pay a penalty of Rs 20 crore and 10 crore respectively for aiding and abetting RIL by providing funds to one the agents appointed by RIL.

As per the order dated January 1, the fine amount has to be paid within 45 days.