Sebi drops Reliance insider trading case

The Securities and Exchange Board of India (Sebi) has disposed of insider trading proceedings against Reliance Petroinvestments, a group company of the Mukesh Ambani-led Reliance Industries.

The case date backs to 2007, before the merger of Indian Petrochemicals Corporation (IPCL) with Reliance Industries. A Sebi order in May 2013 had charged Reliance Petroinvestments with insider trading and imposed a penalty of Rs 11 crore on it.

The order had said Reliance Petroinvestments had made profits of Rs 3.8 crore by acquiring 2.1 million shares of IPCL from February 27 to March 2, 2007, on insider information on dividends and the impending merger.

In the latest order, Sebi Adjudicating Officer Suresh Gupta dropped the proceedings against Reliance Petroinvestments citing a lack of evidence.

“In absence of any evidence to establish the access of unpublished price-sensitive information to Reliance Petroinvestments, it can be concluded that Reliance Petroinvestments and Reliance Industries are not ‘insider’ as alleged,” Gupta said in an order dated March 8.

The latest order comes after the Securities Appellate Tribunal (SAT) last December quashed the Sebi’s May 2013 order and gave the market regulator three months to issue a fresh order in the matter.

Reliance Industries had argued that Reliance Petroinvestments was a group entity formed to acquire shares of IPCL during the government’s disinvestment process. It stated that Reliance Petroinvestments had acted independently and was not in possession of price sensitive information on dividends or the impending merger.

Securities and Exchange Board of India ( SEBI )