Reliance Industries (RIL) has moved the Securities Appellate Tribunal (SAT) against the order passed by markets regulator Securities and Exchange Board of India (Sebi) asking the company to disgorge Rs 447 crore, with interest of 12 per cent per annum since November 2007, it made “illegally”.
In the order dated March 24, Sebi had also barred the company from dealing in the futures and options (F&O) segment. SAT is likely to hear Reliance’s appeal on Wednesday.
The case dates back to 2007, when RIL and other related entities took short positions in the F&O segment of erstwhile subsidiary Reliance Petroleum (RPL), at a time when a large block of shares in the company was to be sold in the cash segment.
The share sale had caused the stock price of RPL to dip in the cash and derivatives segment, benefiting the firm by Rs 513 crore.
Soon after Sebi's order, RIL had termed the regulator's directions as "unjustifiable sanctions" and had said it would challenge the directive.
The company felt the trades examined by Sebi were genuine and bona fide transactions and were carried out keeping the best interests of the company and its shareholders in view.
"Sebi appears to have misconstrued the true nature of the transactions and imposed unjustifiable sanctions," it had said. The group had earlier sought to settle the case, but Sebi had refused. The proceedings in the long-pending case were expedited in the last few months.
Reliance Petroleum was later merged with the listed parent firm.
Twelve other entities were banned by Sebi; they are Gujarat Petcoke and Petro Product supply, Aarthik Commercials, LPG Infrastructure India, Relpol Plastic Products, Fine Tech Commercials, Pipeline Infrastructure India, Motech Software, Darshan Securities, Relogistics (India), Relogistics (Rajasthan), Vinamara Universal Traders and Dharti Investment and Holdings.
Sebi had said the directions were being passed after taking into consideration the magnitude of the fraud across the markets. According to the Sebi order, RIL by employing 12 agents to take separate position limits of open interest on its behalf by executing separate agreements with each one of them and cornering 93.63 per cent of the November futures of RPL, "acted in a fraudulent manner".