Sebi fined reliance and SAT has reversed the order against Mukesh Ambani. SEBI had issued an order against the RIL owner and fined him. The order for fining Ambani is now cancelled.
Mukesh Ambani, a billionaire businessman is the owner and chairman of Reliance Industries. SEBI passed an order imposing a fine against Mukesh and his company in 2021.
The SEBI fined Ambani in the RPL case, which dates to 2007. It is related to the buying and selling of stocks of RPL. There were suspicions of manipulation or influence in RPL’s stocks. Afterwards, RIL chose to sell the five per cent shares it owned in RPL.
Why Sebi Fined Reliance
RPL merged with RIL earlier in 2009. SEBI believed that the company did not follow rules during the merger. The takeover broke the law and regulations during the sale of shares. RIL had sold stocks amounting to 12 crore rupees. According to Sebi, the promoters of the company got stocks of more than 6.83 per cent. The law allows ownership of only five per cent shares. Sebi felt that the sale of shares broke the rules and law
Sebi fined RIL with 25 crore rupees penalty and Ambani an amount of 15 crore rupees.
Sebi Fined Reliance and Two Other Companies
The Sebi fined two other companies along with RIL. Two other entities that were to pay the fine were Navi Mumbai SEZ and Mumbai SEZ. There was a fine of 20 crore rupees on the former and 10 crore rupees on the latter. Anand Jain is the promoter of these two firms. He is an ex-member of the reliance group.
SAT Cancels Sebi’s Order
The three companies have earlier filed a petition in front of SAT. The Securities Appellate Tribunal or SAT has quashed the order of Sebi against Ambani in this case.
The SAT tribunal wrote an 87-page order, which cancelled the 2021 order of Sebi. It also said that Sebi should return any fine already deposited. RIL and other accused firms have a great relief now.
Why was Sebi’s Fine on Mukesh Ambani Reversed
SAT has told Sebi that Ambani is not responsible for breaking the law or for not following the rules. It is the company that has broken the law and not Mukesh as an individual. So, he should not pay a fine. Two officials of the company conducted the sale of shares. Ambani was not aware of the deal. Thus, he is not accountable for it.
Justice Tarun Agarwala is the head of the bench of SAT that is dealing with the case.
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