RELIANCE INDUSTRIES GETS 1-YEAR BAN
India market regulator finds firm guilty of fraudulent activity
MUMBAI companies to return gains of 4.47 billion rupees (RM302.5 million) plus interest, according to an order posted on its website on Friday.
“This is not a normal case of price manipulation or volume manipulation,” said SEBI’s whole time member G. Mahalingam in the order.
This was a unique strategy of “manipulating the settlement price in one market to gain across the volumes accumulated in the other market”, he wrote.
Reliance Industries said on Friday it would appeal the judgment as it believed the trades in Reliance Petroleum shares were genuine and carried out in the interest of its shareholders.
“SEBI appears to have misconstrued the true nature of the transactions and imposed unjustifiable sanctions,” said the company.
SEBI ordered Reliance Industries to pay the stipulated amount within 45 days with interest at 12 per cent a year starting in November 2007. The total including interest is almost 10 billion rupees, according to calculations.
According to the order, Reliance’s board approved the sale of five per cent of its stake in Reliance Petroleum in March 2007 in order to raise funds.
In November, Reliance colluded with 12 small companies to take “substantial positions” in that month’s futures contract of Reliance Petroleum, said the regulator. Reliance had signed agreements with each of these entities and all the profits and losses were transferred to its own account, while they were paid a commission, it added. Bloomberg
Reliance Industries, along with 12 unlisted trading houses it used, carried out unlawful transactions in shares of its former unit Reliance Petroleum Ltd in late 2007.