The Securities Appellate Tribunal (SAT) on Monday overturned the Sebi verdict fining billionaire Mukesh Ambani and his company Reliance Industries Ltd. in connection with the 2007 RPL case, providing a significant reprieve for the tycoon.
In November of 2021, an order was given by the Securities and Exchange Board of India (Sebi) that heavily penalised RIL Chairman Mukesh Ambani as well as two other organisations that were connected to the purported manipulation of shares of the former Reliance Petroleum Ltd (RPL) back in 2007.
Nevertheless, the 2021 order was appealed by all parties involved in the case to the tribunal, and Ambani and his company’s fine was overturned as a result. Aside from RIL, the other two parties involved in this case are Navi Mumbai SEZ and Mumbai SEZ.
Sebi fined Reliance Industries Ltd (RIL) ₹25 crore in January 2021, Ambani, the company’s chairman and managing director, ₹15 crore, Navi Mumbai SEZ Pvt Ltd ₹20 crore, and Mumbai SEZ Ltd ₹10 crore in the RPL case.
Why did Mukesh Ambani receive a penalty from Sebi?
The complaint, which was first filed in 2007, concerns the buying and selling of Reliance Petroleum Limited (RPL). March 2007 saw RIL sell five percent of its shares in RPL, a listed Reliance company that amalgamated with RIL in 2009.
Sebi pointed to a violation of takeover regulations in the ₹12 crore share sale. According to the corporation, the firm’s promoters have acquired a share of over 6.83 percent in the company, beyond the legally mandated 5 percent limit.
Mukesh Ambani and his brother Anil Ambani, together with their mother, spouses, kids, and other parties connected to the transaction, were fined ₹25 crore by Sebi in 2021 after the billionaire and his company were found guilty of manipulating the takeover of shares.
Why did SAT overturn Ambani’s Sebi order?
Sebi was informed by the Securities Appellate Tribunal (SAT) that the RIL Chairman and Managing Director cannot be held accountable for each and every purported legal violation by the business entities, leading the SAT to reverse the verdict against Mukesh Ambani.
“In view of the stark evidence in the form of minutes of the two board meetings of RIL which conclusively proves that the impugned trades were carried out by two senior officials without the knowledge of the appellant, no liability can be fastened upon notice no. 2 (Ambani),” the court stated.
The tribunal further stated that Sebi was unable to establish Ambani’s involvement in the two senior executives’ transaction execution. As a result, the fine imposed on him and RIL has been revoked.
