Sebi fines RIL entity in insider trading case

In an over six-year-old insider trading case involving shares of Reliance Industries' erstwhile subsidiary IPCL, market regulator Sebi on Thursday imposed a penalty of Rs 11 crore on Reliance Petroinvestments Ltd.

Pronouncing Reliance Petroinvestments Ltd (RPIL) guilty of violating the insider trading regulations with regard to its dealings in shares of Indian Petrochemicals Corp Ltd (IPCL) in early 2007, Sebi said that RPIL made profits of over Rs 3.82 crore through these trades.

After taking into account the quantum and nature of the violations, Sebi decided to impose a penalty of Rs 11 crore on RPIL, which was listed as one of the promoter entities by IPCL itself in its regulatory filings as on March 31, 2006, the regulator said in its 17-page late night order.

The regulator said the penalty needs to be paid within 45 days to the account of "SEBI Penalties Remittable to Government of India".

Once a subsidiary of Mukesh Ambani-led Reliance Industries Ltd (RIL), IPCL used to be a separately listed entity of the group, but was later merged with RIL and delisted from the stock exchanges.

Sebi said in its order that its investigations into charges of insider trading norm violations by RPIL showed that the company was having control over IPCL as "promoter having control over the company with the total shareholding of approximately 46 per cent".

Further, RIL was shown as a 'person(s) acting in concert' with RPIL with regard to the shareholding of IPCL, Sebi said.

Sebi said it conducted an investigation in the trading of the shares of IPCL during the period from February 22, 2007 to March 08, 2007.

In the same case, Sebi recently passed another order wherein it dropped the charges of violations of insider trading norms in IPCL shares against Manoj Modi and his wife.

Modi is known as a close confidante of RIL chief Mukesh Ambani and held some senior positions at group entities in the past.

But, Sebi said that the charges of insider trading violations could not be proved against Modi.