Markets regulator Sebi today disposed of a case against Kokila Dhirubhai Ambani related to alleged violation of disclosure norms with regard to share transactions in three Anil Ambani-led Reliance group firms.
The firms are Reliance Capital, Reliance Communications and Reliance Power and Kokila Ambani is a promoter in all of them.
A department of the Securities and Exchange Board of India (Sebi) had carried out inspection of the books of accounts and other records of Reliance Capital Asset Management pertaining to its operations as a portfolio manager.
During the inspection, it was observed that certain shares of Reliance Capital, Reliance Communications and Reliance Power were lying in the client account of Kokila Ambani.
Afterwards, it was noted that through various transactions in 2006 and 2008 in all the three companies, the number of shares held by her through her portfolio account had crossed 25,000.
Also, the shareholding was allegedly not disclosed to the respective companies and stock exchanges as prescribed under Regulation 13(4A) and 13(5) of the PIT (Prohibition of Insider Trading) Regulations.
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Regulation 13(4A) requires necessary disclosures to be made by any person who is promoter or part of promoter group if there is a change in shareholding exceeding 25,000 shares, among others. Regulation 13(5) stipulates the disclosures to be made within two working days.
In an order, Sebi noted that the alleged transactions pertain to 2006 and 2008 and the alleged due dates for compliance with the disclosure requirements for those transactions pertain to 2006, 2007, 2008 and 2009.
As per the regulator, Regulation 13(4A) and consequential amendment to Regulation 13(5) came into effect from August 16, 2011 and did not exist on the date of alleged transactions or the alleged due dates for compliance.
"I also do not find any provision in the said amendment for the retrospective effect of the said amended provisions.
"Since the dates of transactions/ due dates for compliances alleged in the matter precede the coming into force of the regulatory provisions alleged to have been violated by more than two years, the said regulatory provisions are not applicable in the facts and circumstances of the instant matter," Sebi said.
Accordingly, the Securities and Exchange Board of India (Sebi) concluded that the allegation of violation of Regulation 13(4A) and 13(5) of the PIT Regulations against Kokila Dhirubhai Ambani "is not tenable" and disposed of the matter.