Reliance Industries moves SAT against Sebi ban, penalty

New Delhi: Reliance Industries Ltd today approached the Securities Appellate Tribunal against a Sebi order, which had banned the Mukesh Ambani-led firm from equity derivative trading for one year and had asked it to disgorge nearly Rs 1,000 crore in an alleged fraudulent trading case.

The Tribunal is likely to hear RIL's appeal on May 3 to decide on admission and further hearing, sources said. In a nearly 10-year-old case, capital markets regulator Sebi on March 24 had banned Reliance Industries Ltd (RIL) and 12 others from equity derivatives trading for one year, while accusing the company of making "unlawful gains".

Besides, RIL was asked to disgorge Rs 447 crore, along with an annual interest of 12 per cent since November 29, 2007, which itself would be over Rs 500 crore, taking the total disgorgement amount to nearly Rs 1,000 crore.

The case relates to alleged fraudulent trading in the F&O space in the securities of RIL's erstwhile listed subsidiary Reliance Petroleum Ltd (RPL). Soon after Sebi's order, RIL had termed the regulator's directions as "unjustifiable sanctions" and had said it would challenge the directive.

The company felt the trades were examined by Sebi were genuine and bona fide transactions and were carried out keeping the best interest of the company and its shareholders in view.

"Sebi appears to have misconstrued the true nature of the transactions and imposed unjustifiable sanctions," it had added. The group had earlier sought to settle the case, but the Securities and Exchange Board of India (Sebi) had refused.

The proceedings in the long-pending case were expedited in the last few months. Reliance Petroleum was later merged with the listed parent firm. The 12 other entities that were banned by Sebi are Gujarat Petcoke and Petro Product supply, Aarthik Commercials, LPG Infrastructure India, Relpol Plastic Products, Fine Tech Commercials, Pipeline Infrastructure India, Motech Software, Darshan Securities, Relogistics (India), Relogistics (Rajasthan), Vinamara Universal  Traders and Dharti Investment and Holdings.

Sebi had said the directions are being passed after taking into consideration the magnitude of the fraud across the markets. As per the Sebi order, RIL by employing 12 agents to take separate position limits of open interest on its behalf by executing separate agreements with each one of them and cornering 93.63 per cent of the November futures of RPL, "acted in a fraudulent manner".