Published On: Sat, Mar 25th, 2017

Trading Insider: SEBI Prohibited Reliance Industries from equity derivatives market for one year from Today onwards

Reliance Industries has been asked to disgorge Rs 447 crore, along with an annual interest of 12 per cent since November 29, 2007, which itself would be more than Rs 500 crore, taking the total disgorgement amount to nearly Rs 1,000 crore.

Securities and Exchange Board of India (SEBI) today banned Reliance Industries and 12 others companies from equity derivatives trading for one year and directed the Mukesh Ambani-led firm to disgorge nearly INRĀ 1,000 crore for alleged fraudulent trading in a 10-year-old case.

A company spokesperson said it will challenge the order. Reliance Industries has been asked to disgorge Rs 447 crore, along with an annual interest of 12 % since November 29, 2007, which itself would be more than INRĀ 500 crore, taking the total disgorgement amount to nearly INR 1,000 crore.

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The case related to alleged fraudulent trading in the F&O space in the securities of RILs erstwhile listed subsidiary Reliance Petroleum.

In a 54-page order passed by Whole-Time Member G Mahalingam, RIL and 12 other entities have been prohibited from dealing in the “equity derivatives in the F&O segment of stock exchanges, directly or indirectly”.

Prohibition Of One Year –

The ban will be in place for one year from today onwards. The 12 other entities which have been banned are Gujarat Petcoke and Petro Product supply, Aarthik Commercials, LPG Infrastructure India, Relpol Plastic Products, Fine Tech Commercials, Pipeline Infrastructure India, Motech software, Darshan Securities, Relogistics (India), Relogistics (Rajasthan), Vinamara Universal Traders and Dharti Investment and Holdings. Reliance Industries has been directed to disgorge the amount, along with 12% interest within 45 days.

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Mahalingam said the directions are being passed after taking into consideration the magnitude of the fraud across the markets. “I am inclined to pass certain directions against the noticees in order to protect the interest of the investors and reinstil their faith in the regulatory system,” the order said. “The noticees may, however, square off or close out their existing open positions.”

The Reliance Industries group had earlier sought to settle the case, but SEBI had refused. The proceedings in the long-standing case were expedited in the last few months. Reliance Petroleum has been merged with the listed parent firm.

Meanwhile, Reliance Industries issued a statement with regards to the matter and has said that SEBI had imposed unjustifiable sanctions.

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