SEBI notice to RIL seeks to bar it from capital market
November 23, 2009
Market regulator Securities and Exchanges Board of India (SEBI) is understood to have asked Reliance Industries Ltd (RIL) as to why it should not be barred from accessing the market for violation of insider-trading norms—a charge denied by the company, reports PTI.
“RIL has not violated any regulations,” a spokesperson for the Mukesh Ambani-led company said on Monday, when asked about SEBI's show-cause notice in relation to sale of shares of its then subsidiary Reliance Petroleum Ltd (RPL) in late 2007.
SEBI is understood to have issued a show-cause notice in April this year against RIL, asking why it should not take action for possible violation of insider-trading norms in relation to sale of RPL shares in November 2007.
Subsequent to this, SEBI early last month is said to have amended the notice, asking RIL to explain why it should not be barred from accessing the market, directly or indirectly, and why a direction should not be issued for disgorgement of proceeds from the said sale of RPL shares.
"Reliance Industries has always abided by all rules and regulations of SEBI and hence, has neither violated any provisions of Insider Trading nor has acted in any manner so as to attract provisions under the related sections of SEBI Act," the spokesperson said in an emailed statement.
"We have accordingly, submitted our detailed reply to SEBI and have not received any further communication in this regard," the spokesperson added.
The notice is said to have been issued following a probe into charges of insider-trading in securities of group company RPL. SEBI is believed to have begun the probe in early 2008, after the issue was raised in Parliament.
RIL had sold over 4% equity in RPL in November 2007, prior to which heavy selling, allegedly by various group entities, was noticed in the futures contract of RPL.
RPL, which last traded as a separate entity on the bourses on 24th September, has since been merged with RIL. — Yogesh Sapkale[email protected]