Insider trading: Sebi rejects RIL's consent appeal

Market regulator Securities and Exchange Board of India is believed to have turned down any out-of-court like settlement sought by Reliance Industries in the ongoing probe relating to alleged insider trading in shares of erstwhile group firm Reliance Petroleum Limited.

Sources said a final order could be made soon in this case by Sebi, which has rejected twice RIL's request for settling the case by paying a consent fee -- an out-of-court settlement like resolution reached through negotiations between the two parties.

When contacted, an RIL spokesperson declined to comment on whether its requests have been rejected by Sebi for settling the matter through payment of consent fees.

The investigation into Mukesh Ambani-led RIL relates to alleged violation of insider trading norms way back in 2007 in the dealings of shares of now-delisted subsidiary RPL.

Market leader RIL's shares have been under pressure for nearly a month now amid speculations of an imminent Sebi order and have lost over 10 per cent in value.

Despite a gain of about a percentage point today, the stock continues to remain below Rs 1,000 mark.

It closed at Rs 988.15, up 1.16 per cent.

Sources said that RIL, in its second consent settlement request, offered a substantial increase to its earlier consent fee offer of Rs 2 crore (Rs 20 million) in November 2009.

But, the market regulator is said to have assessed the illegal gains from the alleged insider trading at over Rs 500 crore (Rs 5 billion) and found the offered consent fee too less in comparison.

Incidentally, the capital market regulator would also hear on September 3 a case related to alleged violations in the market dealings of two Anil Ambani group companies -- Reliance Infrastructure and Reliance Natural Resources.

The two Anil Dhirubhai Ambani Group firms, along with some top group executives, including chairman Anil Ambani, have been issued notices by Sebi in this regard and have been asked to appear for personal hearing on September 3.

The case is believed to be related to transactions in 2007. Interestingly, the Sebi probe on RIL also relates to transactions conducted in the year 2007, when it allegedly violated insider trading norms in dealings of shares of RPL.

The investigations into both the cases started on the basis of anonymous complaints received by Sebi.

A subsidiary of RIL, RPL was merged with the parent last year and subsequently delisted from the stock market.

Sebi had begun quasi-judicial proceedings against RIL after it found violations to insider trading regulations pursuant to its investigation in the trading pattern in the RPL stock for the period between November 1-29, 2007.