SEBI all set to penalize RIL over insider trading
Mumbai: The alleged involvement of India's largest corporate house Reliance Industries in a case of insider trading has resulted in SEBI getting geared up to penalize them. A hearing would be held very soon by SEBI before the penalty amount if finalized or quantified.
The evidences and proofs available with SEBI are totally against RIL and clearly show that RIL has violated the rules. The case relates to 2007, when RIL sold 4.1 percent equity in its Reliance Petroleum Ltd in an open market transaction, earning huge profits. This has caused a lot of flur about it constituting as an act of insider trading since RIL would have insider knowledge of their own company, Reliance Petroleum Limited (RPL).Ever since this incident took place, Reliance Petroleum has been merged with its parent Reliance Industries since September 2009 and also got delisted from the stock market.
On its part, Reliance Industries in the past has made several unsuccessful attempts to settle this case with SEBI. RIL had filed consent petition in November 2009 offering to pay
2 crore and again in August 2010, to pay close to 10 crore, both of which have been rejected by SEBI.
This situation has come into picture because after assessing the illegal gains from the alleged insider trading, the market regulator has sensed the amount to be around500 crore which when compared to the offered consent fee is a meager amount in comparison.
A personnel hearing is being granted to the officials of RIL by SEBI before passing its final order. The penalty amount has not yet been stated but is expected to be extremely and as per the norms, it could be 25 crore or three times the gain from the illegal transaction - whichever is higher.
Now with the final order from SEBI likely to be passed soon, the markets will closely watch the reaction from India's largest corporate.
JITENDRA KUMAR SINGH
PGDM-SEM2
The evidences and proofs available with SEBI are totally against RIL and clearly show that RIL has violated the rules. The case relates to 2007, when RIL sold 4.1 percent equity in its Reliance Petroleum Ltd in an open market transaction, earning huge profits. This has caused a lot of flur about it constituting as an act of insider trading since RIL would have insider knowledge of their own company, Reliance Petroleum Limited (RPL).Ever since this incident took place, Reliance Petroleum has been merged with its parent Reliance Industries since September 2009 and also got delisted from the stock market.
On its part, Reliance Industries in the past has made several unsuccessful attempts to settle this case with SEBI. RIL had filed consent petition in November 2009 offering to pay
2 crore and again in August 2010, to pay close to 10 crore, both of which have been rejected by SEBI.This situation has come into picture because after assessing the illegal gains from the alleged insider trading, the market regulator has sensed the amount to be around
500 crore which when compared to the offered consent fee is a meager amount in comparison.A personnel hearing is being granted to the officials of RIL by SEBI before passing its final order. The penalty amount has not yet been stated but is expected to be extremely and as per the norms, it could be
25 crore or three times the gain from the illegal transaction - whichever is higher. Now with the final order from SEBI likely to be passed soon, the markets will closely watch the reaction from India's largest corporate.
JITENDRA KUMAR SINGH
PGDM-SEM2