Sebi investigating RPL insider trading: Govt

The Securities and Exchange Board of India (Sebi) is investigating trading in Reliance Petroleum (RPL) stock on the bourses relating to the sale of 4.01 per cent in the company by parent Mukesh Ambani-promoted Reliance Industries last November.

"Sebi has informed that it has initiated an examination in the matter," Minister of State for Finance Pawan Kumar Bansal said in the Rajya Sabha on Tuesday.

The minister was responding to a question about whether the government had taken action against the promoters, or affiliates of Reliance Industries regarding the "recent mammoth insider trading activities" in its Reliance Petroleum unit.

In a statement Reliance Industries said: "Reliance Industries Ltd and its group companies have complied with all the rules and regulations and will cooperate and provide all the necessary information to the concerned authorities."

Reliance Industries sold 4.01 per cent (180.4 million shares) stake in RPL for Rs 4,023 crore, riding high on massive run-up in the subsidiaries' share prices during that time.

The RPL stock price, which hit a life-high of Rs 295 in November, is now quoting nearly 50 per cent below the peak at Rs 152 on the Bombay Stock Exchange on Tuesday.

Reliance Industries' holding in RPL came down from 75 per cent to 70.99 per cent after the stake sale.

In a communiqué to stock exchanges to announce the stake sale, Reliance Industries had said the sale helped to broadbase RPL's shareholding.

The number of RPL shareholders has increased from 1.2 million at the time of the initial share sale to 1.6 million. "The sale of shares monetises only a very small portion of RIL's holding in RPL," the filings to exchanges had said.

The stake sale at that time fuelled speculation that Chevron Corporation, one of the world's largest global energy companies, may pull out of RPL by selling its 5 per cent stake to Reliance Industries.

Speculation arose because rules stipulate that all listed companies will be required to ensure a minimum level of public shareholding at 25 per cent of the total number of issued shares of a class or kind for the purpose of continuous listing.

However, government companies, infrastructure companies and companies referred to the Board for Industrial and Financial Reconstruction (BIFR) do not come under this category.