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The Securities and Exchange Board of India (Sebi) has concluded its final investigation in the Reliance Industries (RIL) and Reliance Petroleum merger, sources said. The charge is of Fraudulent and Unfair Trade Practices (FUTP) . The regulator was probing for illicit gains during the 2007 merger.
“The hearing (reportedly this Wednesday) was conducted by wholetime member Rajeev Kumar Agarwal. The regulator is in the process of examining the company's final submission,” said a source.
An RIL spokesperson stated that to hear their side of the arguments the regulator has given the next date of hearing as Tuesday.
If held guilty, Sebi provisions entail that the penalty could be Rs 25 crore or three times the illicit gains. It is, however, certain that once such a final order is passed, RIL would approach the Securities Appellate Tribunal (SAT).
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RIL had earlier applied for a consent mechanism, which would have allowed the company to settle charges without admission or denial of guilt. However, Sebi rejected this.
Sebi's investigations had found that RIL, in connivance with other entities related/connected to it, took short positions in the futures and options segments of the National Stock Exchange in the Reliance Petroleum scrip and sold around 200 million shares, thereby making an illegal gain of about Rs 513 crore.
RIL, on rejection of consent went to SAT. However, SAT did not rule in favour of the company. The Sebi consent norms exclude serious offences such as insider trading and FUTP from the settlement process.
