SAT adjourns hearing on RIL-Sebi case to April 16
Mar 18 2014 , Mumbai
Reliance has been fighting against market watchdog Sebi in the insider-trading case and the regulator's exclusion of the company from the consent mechanism.
Since Reliance senior counsel Janak Dwarkadas could not be present in the courtroom due to a medical emergency, the company sought adjournment, following which the tribunal agreed to hear the matter on April 16.
SAT has been hearing the seven-year-old case of alleged insider trading arising from the merger of Reliance Petroleum (RPL) with RIL in 2007.
During the previous hearing on February 24, the tribunal had sought clarifications from Sebi on the impact of the new consent mechanism norms in the ongoing case against Reliance.
SAT presiding officer JP Devadhar had asked Sebi senior lawyer Darius Khambata to give the regulator's stance on the effect of the new regulations, which came into force with retrospective effect from April 2007.
Sebi had notified the new consent norms on January 9, after issuing the draft consent norms in May 2012.
The consent mechanism allows companies and individuals to settle disputes with Sebi by paying a sum without admission or denial of the alleged wrongdoing and by repaying any ill-gotten gains.
RIL, prior to the merger of Reliance Petroleum with itself, allegedly short-sold a 4.1 per cent stake in RPL valued at Rs 4,023 crore to prevent a slump in the stock.
RIL sold RPL shares first in the futures market and later in the spot market, covering the share sale in the futures market, it was alleged.
In 2008, Sebi initiated a probe into the matter and in 2010 initiated quasi-judicial proceedings and said it had found that RIL had booked a profit of Rs 513 crore in the futures segment through this deal worth Rs 4,023 crore.
Sebi argued that the company was aware of the sale of shares and sold futures ahead of that, amounting to insider trading, and sent a show-cause notice to the company.
RIL had challenged the Sebi show-cause notice in December 2010. Following this, Sebi ordered a probe and found that RIL had violated insider-trading norms. Though RIL moved Sebi for a consent settlement, the regulator did not entertain the application, forcing RIL to move the SAT.