Sebi imposes 1-year ban on RIL, 12 others in equity derivatives trading

New Delhi: The Securities and Exchange Board of India (Sebi) on Friday imposed 1-year ban on Reliance Industries, 12 others in equity derivatives trading.

Sebi has also asked Reliance Industries to disgorge Rs 447 crore plus interest in 10-year-old case involving erstwhile listed arm Reliance Petroleum Ltd (RPL).

The case involved trading in shares of RIL’s group company, Reliance Petroleum, in November, 2007.

RIL, prior to the merger of RPL with itself, allegedly short-sold 4.1 percent stake in RPL valued at Rs.4,023 crore to prevent a slump in the stock. The RPL shares were sold first in the futures market and later in the spot market, covering the share sales in the futures market, it was alleged.

In 2008, Sebi undertook a probe into the matter and in 2010 initiated quasi-judicial proceedings and said it had found that RIL had booked a profit of Rs 513 crore in the futures segment through this deal worth Rs.4,023 crore. Sebi argued that the company was aware of the sale of shares and sold futures ahead of that, therefore amounting to insider trading, and sent a show-cause notice to the company.

RIL had challenged the Sebi show-cause notice in December 2010. Following this, Sebi ordered a probe and found that RIL had violated insider-trading norms. Though RIL moved Sebi for consent settlement, the regulator did not entertain the application, forcing RIL to move the SAT.