Mukesh Ambani
Photographer: Dhiraj Singh / Bloomberg
Photographer: Dhiraj Singh / Bloomberg
India’s market regulator ordered billionaire Mukesh Ambani and his conglomerate Reliance Industries Ltd. will pay a combined fine of 400 million rupees ($ 5.5 million) for allegedly violating stock trading rules about 13 years ago.
In your order dated January 1, the Securities and Exchange Board of India said that Reliance and its agents operated to supposedly make improper profits from the sale of shares in Reliance Petroleum Ltd., a former unit, both in the spot and futures markets. Reliance Industries needs to pay 250 million rupees and Ambani, the chairman of the board, is responsible for the alleged manipulation trade, Sebi said.
A Reliance spokesman said he could not immediately comment on the request.
After years of investigation, Sebi noted in 2017 that Reliance, along with 12 unlisted brokers, carried out illegal transactions with Reliance Petroleum shares. They bought shares between March and November 2007, and then the company took short positions – bets that the stock price would fall – in the future of November before starting to sell the shares to push the price down, according to Sebi.
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In the same year, the regulator also told companies to return earnings of 4.47 billion rupees plus interest and banned Reliance from trading futures and options in India’s stock markets for a year. Reliance appealed the order saying it was “unjustifiable sanctions” on genuine transactions carried out in the interests of shareholders.
Reliance Petroleum merged with Reliance Industries in 2009. The oil entity was a listed subsidiary of the company owned by Ambani and owned a refinery of 580,000 barrels per day in a special economic zone in Jamnagar, in the Indian state of Gujarat, where the group it has the largest refining and petrochemical complex in the world.