Shares of Mukesh Ambani-controlled Reliance Industries Ltd (RIL), India’s most valued company in terms of market capitalisation, hit a 52-week low on Friday on market buzz that the company would settle the regulatory probe into insider trading by way of a consent order.
RIL shares slipped to the low of Rs 902 on the National Stock Exchange during the day’s trade before closing at Rs 917.80, down 2.64 per cent, or Rs 24.90, on Friday.
“There is a buzz in the market that RIL will pay Rs 200 crore to settle the regulatory probe through a consent order,” said S P Tulsian, an independent market analyst.
This comes on the heels of two companies controlled by brother Anil Ambani – Reliance Infrastructure and Reliance Natural Resources – receiving a consent order from the Securities and Exchange Board of India (Sebi) for Rs 50 crore.
It will be the third such appeal to Sebi by RIL. Its two previous appeals, in August 2010 and November 2009, were rejected by the market regulator.
An RIL spokesperson declined to comment. Company officials, however, admitted that negotiations were on with the market regulator to settle the case because the consent fee offered was too low.
Sebi was probing alleged violation of insider trading norms by the company in the dealings of shares of now-delisted subsidiary Reliance Petroleum (RPL), in 2007. Sebi is said to have estimated the illegal gains from the alleged insider trading at over Rs 500 crore and found the consent fee too little.
Sebi had begun quasi-judicial proceedings against RIL after it found violations in insider trading regulations pursuant to its investigation in the trading pattern in the RPL stock for the period between November 1 and November 29, 2007.
RPL, a subsidiary of RIL, was merged with the parent in 2009 and subsequently delisted from the stock market. Sebi first issued showcause notices to RIL over this in May 2009, while the initial probe had begun in early 2008.
