Mukesh Ambani
Photographer: Dhiraj Singh / Bloomberg
Photographer: Dhiraj Singh / Bloomberg
Indian market regulator orders billionaire Mukesh Ambani and his conglomerate Reliance Industries Ltd. will pay a combined penalty of 400 million rupees ($ 5.5 million) for violating stock trading rules about 13 years ago.
Into the order dated January 1, Securities and Exchange Board of India said Reliance and its agents acted to obtain undue profits from the sale of shares Reliance Petroleum Ltd., a former unit, both in the cash market and in the futures market. Reliance Industries has to pay 250 million rupees, and Ambani, the president, is responsible for the alleged manipulative transactions, Sebi said.
A Reliance spokesman said he could not immediately comment on the order.
After years of investigations, Sebi noticed in 2017 that Reliance, along with 12 unlisted trading houses, conducted illegal transactions with Reliance Petroleum shares. They bought shares between March and November 2007, and then the company took short positions – I bet the stock price would fall – in the near future, before starting to sell the shares to reduce the price, according to Sebi.
Reliance Industries falls after the handling fee, the ban on trading
In the same year, the regulator also told companies to return gains of 4.47 billion rupees plus interest and banned the dependency from trading futures and options on the Indian capital markets for a year. Reliance appealed the order, saying there were “unjustified sanctions” for genuine transactions in the interests of shareholders.
Reliance Petroleum merged with Reliance Industries in 2009. The oil company was a listed subsidiary of Ambani and owned a 580,000-barrel-a-day refinery in a special economic zone in Jamnagar, in the western Indian state of Gujarat. the largest refining and petrochemical complex in the world.