Supreme Court Overturns Rs 447 Crore Order Against Reliance Industries
The Supreme Court overturned a Rs 447 crore order against Reliance Industries Limited, focusing on its stock trading practices in RPL shares back in 2007. The court's decision highlighted nuanced aspects of regulatory compliance and corporate accountability.
Highlights
- •- Supreme Court nullified Rs 447.27 crore order against Reliance Industries
- •- RIL contested the ruling by Securities Appellate Tribunal (SAT) Mumbai
- •- The appellate found SEBI directives were violated, but not all fraud claims stood
- •- Rs 250 crore to be refunded to RIL from investor's protection fund
India's top court, the Supreme Court of India, on Friday nullified a Rs 447.27 crore order previously directed against Reliance Industries Limited (RIL) in connection with the trading practices during the sale of shares of Reliance Petroleum Limited (RPL) in 2007.
The apex court's decision partially supported an appeal filed by RIL, which challenged a November 2020 order from the Securities Appellate Tribunal (SAT), Mumbai. The SAT had dismissed RIL's earlier appeal against SEBI's March 24, 2017, directive regarding the sale of RPL shares.
Supreme Court
The bench of Justices JB Pardiwala and R Mahadevan noted that while it agreed with several points raised by SAT in their majority judgment, ultimately, it had no choice but to overturn the Rs 447.27 crore disgorgement order.
"In result, the appeal partly succeeds and is hereby partly allowed," the bench stated, directing RIL to be refunded the Rs 250 crore previously deposited in the investor's protection fund, as per the December 17, 2020, order. The recovery of the balance, including interest, remains pending.
Relying on a previous whole-time member judgment which found RIL made an illegal and undue gain through price manipulation during futures segment trading in RPL shares, the top court acknowledged this as a significant issue. Yet, it highlighted that RPL was 75% subsidiary of RIL at the time of these operations, providing context to the case.
The court also upheld the majority view regarding penalties for violations under the Securities and Exchange Board of India (SEBI) disclosure policies but ultimately set aside the fraud finding related to PFUTP Regulations.
