SAT pulls up Sebi for delay in filing reply in RIL insider trading case

Tribunal to hear the matter on June 26

The Securities Appellate Tribunal (SAT) on Wednesday pulled up capital market regulator Securities and Exchange Board of India (Sebi) for delay in making submissions in the high-profile Reliance Industries (RIL) insider trading case.

In January, the tribunal, which hears appeals against decisions taken by the market regulator, had asked both Sebi and RIL to clarify the implications of the new consent norms on the appeal.

RIL has moved SAT against Sebi's refusal to settle an insider trading case through the consent route. The insider trading case dates backs to 2007, when RIL had allegedly made unlawful gains of around Rs 513 crore by trading in the shares of erstwhile Reliance Petroleum (RPL) during its merger.

“We asked you in January for a clarification and till now we are waiting for it. The case has been pending for over an year in the tribunal,” said JP Devdhar, presiding officer, SAT.

The observation was made after RIL’s counsel Janak Dwarkadas requested the tribunal for an early hearing.

A lawyer representing Sebi assured the tribunal that the regulator would submit its reply within two days. RIL counsel sought time to study the submissions to be made by Sebi.

The matter, which was previously adjourned on April 16, will now be heard on June 26.

In May 2012, Sebi had issued a circular tightening norms for consent settlement to exclude serious offenses like insider trading.

The consent mechanism, however, attained legal sanity only October last year after the an ordinance was promulgated for giving Sebi more powers. Subsequently, the May circular was transformed into a regulation.

Sebi has been investigating RIL for profiting from insider information on RPL, a subsidiary company which later merged with RIL.

Sebi's probe has been ongoing since 2008. It issued a show cause notice in 2010. Reliance subsequently sought to settle the matter through the consent mechanism, which allow for entities to pay a sum of money to settle charges against them, 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 challenging this decisions.