Mukesh Ambani
Photographer: Dhiraj Singh / Bloomberg
Photographer: Dhiraj Singh / Bloomberg
The market regulator in India has ordered billionaire Mukesh Ambani and his conglomerate Reliance Industries Ltd. must pay a combined fine of 400 million rupees ($ 5.5 million) for violating the rules of stock trading about 13 years ago.
In sy order dated January 1, the The Securities and Exchange Board of India has said that Reliance and its agents allegedly made unnecessary profits from the sale of shares in Reliance Petroleum Ltd., a former unit, in both the cash and futures markets. Reliance Industries has to pay 250 million rupees and Ambani, the chairman, is responsible for the alleged manipulation, Sebi said.
A Reliance spokesman said he could not immediately comment on the order.
After years of investigation, Sebi noted in 2017 that Reliance, along with 12 unlisted trading houses, had made illegal transactions in the shares of Reliance Petroleum. They bought shares between March and November 2007, and then the company took short positions – betting that the share price would fall – in November futures contracts before they started selling the share to lower the price, according to Sebi.
Reliance Industries falls after manipulation charge, trade ban
In the same year, the regulator also told the companies to make profits of 4.47 billion rupees plus interest and banned Reliance from trading futures and options on India’s stock markets. Reliance appealed the order, saying it was “unjustifiable sanctions” on real transactions carried out in the interest of shareholders.
Reliance Petroleum merged with Reliance Industries in 2009. The petroleum entity is a listed subsidiary of the Ambani firm and owns a 580,000 barrel refinery per day in a special economic zone in Jamnagar in the western Indian state of Gujarat, where the group has the world’s largest refining and petrochemicals.