Mukesh Ambani
Photographer: Dhiraj Singh / Bloomberg
Photographer: Dhiraj Singh / Bloomberg
Indian market regulator ordered billionaire Mukesh Ambani and his conglomerate Reliance Industries Ltd. will pay a combined fine of Rs 400 crore ($ 5.5 million) for allegedly violating stock trading rules about 13 years ago.
On his order of January 1, Securities and Exchange Board of India said that Reliance and its agents operated to allegedly make improper profits by selling shares of Reliance Petroleum Ltd., a former unit, both in the cash market and future. Reliance Industries has to pay 250 million rupees and Ambani, the president, is responsible for the alleged manipulative trade, Sebi said.
A Reliance spokesman said he could not comment immediately on the order.
After years of investigation, Sebi observed in 2017 that Reliance, along with 12 unlisted commercial houses, were conducting illegal transactions with Reliance Petroleum shares. They bought shares between March and November 2007, and then the company took short positions (bets on lowering the share price) in November futures before starting to sell the shares to bring the price down, according to Sebi.
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The same year, the regulator also told companies to return gains of Rs 4,472 crore plus interest and banned reliance on trading futures and options in India’s equity markets for a year. Reliance had appealed to the order saying they were “unjustifiable sanctions” for genuine transactions made in the interests of shareholders.
Reliance Petroleum merged with Reliance Industries in 2009. The oil company was a listed subsidiary of the Ambani-owned company and owned a 580,000-barrel-a-day refinery in a special economic zone in Jamnagar, east of ‘West India of Gujarat, where it has the largest refining and petrochemical complex in the world.