SEBI charges Mukesh Ambani and his Reliance conglomerate

Securities and Exchange Board of India (SEBI), India’s market regulator, ordered billionaire Mukesh Ambani and his conglomerate Reliance Industries Ltd. to pay a combined penalty of INR 400 million ($5.5 million). The regulatory body charged such a fine to the Indian billionaire and his company, allegedly violating share-trading rules in 2007.

The Indian markets watchdog fined Reliance Industries INR 250 million ($3.42 million) and its chairman Mukesh Ambani INR 150 million.

In its order dated January 1, 2021, the SEBI stated that Reliance and its agents operated to allegedly earn undue profits from the sale of shares in Reliance Petroleum Ltd., a former unit, in both the cash and futures markets.

After years of investigation, SEBI observed in 2017 that Reliance, along with 12 unlisted trading houses, carried out unlawful transactions of Reliance Petroleum shares. They bought stock between March and November of 2007, and then the company took short positions — bets that the share price would fall — in November futures before starting to sell the stock to push down the price, according to SEBI.

The regulator also told the companies to return gains of 4.47 billion rupees plus interest and banned Reliance from trading futures and options on India’s equity markets for a year.

Regulator Sebi imposed penalties on Reliance Industries Ltd and its Chairman and Managing Director Mukesh Ambani and two other entities for alleged manipulative trading in the shares of erstwhile Reliance Petroleum Ltd (RPL) back in November 2007.

However, Reliance appealed that the order was “unjustifiable sanctions” on genuine transactions that, carried out in the interest of shareholders.

Reliance Petroleum merged with Reliance Industries in 2009. The petroleum entity was a listed subsidiary of the Ambani-owned firm and owned a 580,000 barrel-a-day refinery in a special economic zone at Jamnagar. The company currently has the world’s largest refining and petrochemicals complex in Jamnagar, in the western Indian state of Gujarat.