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Bombay 9 days ago
SEBI imposed a fine of Rs 40 crore on Reliance Industries and its chairman Mukesh Ambani. Reliance was fined Rs 25 crore and Mukesh Ambani Rs 15 crore for trading in Reliance Petroleum shares. Reliance Petroleum announced the sale of its shares when it was a separate company. As a result, the prices fell. Shares of Reliance Petroleum were then bought and sold. It was tampered with by SEBI.
Shares were bought and sold to influence the price
Reliance Petroleum was previously a separate listed company. In March 2007, Reliance Industries announced the sale of 4.1% stake in Reliance Petroleum. Reliance Petroleum shares were bought and sold in November 2007 after the company’s stock price began to decline. The SEBI investigation revealed that the sale and purchase were made incorrectly to influence the stock price. Significantly, Reliance Petroleum merged with Reliance Industries in 2009.
Ordinary investors did not realize that Reliance Industries was behind this trading
SEBI said in a 95-page order that any manipulation of the share price undermines investor confidence in the market, as such manipulation harms investors. According to SEBI, in this case, ordinary investors do not know that Reliance Industries was behind the sale. The buying and selling was wrong, which affected the shares of Reliance Petroleum. Which in turn hurt ordinary investors.
The court upheld SEBI’s latest decision
SEBI had asked Reliance Industries and 12 promoters earlier on March 24, 2017 to deposit Rs 447 crore. At the same time, their shares were banned from trading. The company appealed this decision to the Securities Appeal Tribunal. But in November 2020, the court dismissed the company’s appeal, saying Sebi upheld the decision. Reliance Industries then said it would challenge the court ruling in the Supreme Court. In a stock exchange filing after the court ruling, Reliance Industries said trading in the shares did not violate any rules.