RIL insider trading case hearing adjourned

Sebi has been investigating RIL for profiting from insider information on Reliance Petroleum, a subsidiary company that later merged with RIL

The Securities Appellate Tribunal (SAT), a forum for appealing against the decisions of the Securities and Exchange Board of India (Sebi), adjourned the hearing on Wednesday of an appeal by Reliance Industries Ltd (RIL) in an insider trading case.

The date of the next hearing is to be announced later. The tribunal asked for clarity on some issues, including the proposal made by an internal committee of the regulator to the High Powered Advisory Committee which decides on the consent application.

Sebi has been investigating RIL for profiting from insider information on Reliance Petroleum, a subsidiary company which later merged with RIL.  Sebi’s probe has been on since 2008. It issued a show-cause notice in 2010. Reliance subsequently sought to settle the matter through the consent mechanism, which allow entities to pay a sum of money to settle charges without admitting or denying guilt.  Sebi declined to allow such a settlement and made the changes disallowing settlement of insider trading through the consent route.

Reliance then moved SAT against these Sebi moves.

The tribunal previously adjourned it on March 18, seeking clarity on the effect of new regulations on the case. The rules say certain offenses, including insider trading, cannot generally be settled through the consent mechanism. The tribunal had sought written submissions on the impact of the rule changes on the case.  

“Sebi shall not settle the defaults listed below… (including)…insider trading that is violation of Regulation 3 and 4 of the Sebi (Prohibition of Insider Trading) Regulations, 1992,” said the circular.

The stock market regulator has penalised RIL in a separate case of insider trading to the tune of Rs 11 crore. Sebi had found after investigations that a subsidiary, Reliance Petroinvestments, had traded in the shares of Indian Petrochemicals before its merger with RIL, as well as the announcement of an interim dividend.