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Mukesh Ambani
Photographer: Dhiraj Singh / Bloomberg
Photographer: Dhiraj Singh / Bloomberg
Indian market regulator ordered billionaire Mukesh Ambani and his conglomerate Reliance Industries Ltd. to pay a combined fine of 400 million rupees ($ 5.5 million) for allegedly breaking the stock trading rules about 13 years ago.
In his order dated January 1, The Securities and Exchange Board of India said Reliance and its agents allegedly made improper profits from the sale of shares in Reliance Petroleum Ltd., a former unit, in the spot and futures markets. Reliance Industries has to pay 250 million rupees and Ambani, the chairman, is responsible for the alleged manipulative trade, Sebi said.
A Reliance spokesperson said he couldn’t immediately comment on the order.
After years of investigation, Sebi observed in 2017 that Reliance, along with 12 unlisted trading houses, had made illegal transactions in shares of Reliance Petroleum. They bought shares between March and November 2007, then the company took short positions – bet the share price would go down – on the November futures contracts before starting to sell the shares in order to drive the price down. , according to Sebi.
Reliance Industries falls after handling fees, ban on trading
That same year, the regulator also asked companies to return earnings of 4.47 billion rupees plus interest and banned Reliance from trading futures and options on Indian stock markets for a year. Reliance had appealed against the order, claiming it was “unjustifiable penalties” on genuine transactions carried out in the interests of shareholders.
Reliance Petroleum merged with Reliance Industries in 2009. The petroleum entity was a listed subsidiary of the Ambani-owned company and owned a 580,000 barrels per day refinery in a special economic zone in Jamnagar, Indian state of Gujarat, where the group owns the largest refining and petrochemical complex in the world.
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