Sebi drops insider trading case against Kokila Dhirubhai Ambani

The Securities and Exchange Board of India (Sebi) has ended insider trading proceedings against Kokila Dhirubhai Ambani, promoter in three companies of the Anil Ambani-led Reliance Group.

Sebi in 2014 had alleged inadequate disclosure by Kokila Ambani relating to holding of shares in some companies, including Reliance Capital, Reliance Communications and Reliance Power.

The regulator said during inspection of books of accounts and other records of Reliance Capital, it had observed that shares in the account were different from the shareholding disclosed as ‘promoter’ by all three companies of the group.

Citing the stock exchange data of shareholding of all the three companies, Sebi observed the number of shares held by Kokila Ambani through her portfolio account were more than 25,000.

Sebi found this was not disclosed to the respective companies and stock exchanges as prescribed under Sebi’s Prevention of Insider Trading (PIT) violation.

Based on the findings, the regulator had issued a show-cause notice to Kokila Ambani in May 2014.

On Friday, Sebi’s adjudicating officer dropped the proceedings, saying the said regulation did not exist when the show-cause was issued.

”I note that Regulation 13(4A) of the PIT regulations and consequential amendment have come into effect from August 16, 2011.

Thus, the amended regulations did not exist on the date of alleged transactions or the alleged due dates for compliance. I also do not find any provision in the said amendment for retrospective effect of the said amended provisions,” said Gupta in the order.

Securities and Exchange Board of India ( SEBI )