RPL stock case: Relief to Mukesh Ambani as SC junks Sebi plea

A bench of Justices J B Pardiwala and R Mahadevan said it was not inclined to interfere with the order passed by SAT.

"Impugned order was passed in 2023 which was challenged in 2023 and after one year, now the matter is being circulated.

"No question of law involved in this appeal warranting our interference. Dismissed. You can't chase a person like this for years," the bench said.

Sebi had moved the top court against the December 4, 2023, order of the Securities Appellate Tribunal (SAT).

The SAT ruling came after all the entities appealed before the tribunal against the order passed by the Securities and Exchange Board of India (Sebi) in January 2021.

In January 2021, Sebi imposed a Rs 25 crore fine on Reliance Industries Ltd (RIL), Rs 15 crore on Ambani, who is the company's chairman and managing director, Rs 20 crore on Navi Mumbai SEZ Pvt Ltd and Rs 10 crore on Mumbai SEZ Ltd in the RPL case.

Navi Mumbai SEZ and Mumbai SEZ are promoted by Anand Jain, who once served in the Reliance Group.

The tribunal had quashed Sebi's order passed in 2021 against Ambani, Navi Mumbai SEZ and Mumbai SEZ.

It had also directed the Sebi to return the fine amount in case it has been deposited by them with the regulator.

The case pertains to the sale and purchase of RPL shares in the cash and futures segments in November 2007.

This followed RIL's decision in March 2007 to sell around 5 per cent stake in RPL, a listed subsidiary that was later merged with RIL in 2009.

The tribunal had said that RIL's board had specifically authorised two persons to decide the divestment.

Further, the tribunal noted that it cannot be suggested that the managing director is ipso facto responsible for every alleged contravention of law by the corporate entities.

"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 tribunal had said.

Sebi failed to prove that Ambani was involved in the execution of the trades carried out by two senior executives, it had added.

Meanwhile, in its order passed in January 2021, Sebi had stated that RIL appointed 12 agents to undertake transactions in the November 2007 RPL Futures.

These 12 agents took short positions in the Futures and Options (F&O) segment on behalf of the company while the company undertook transactions in RPL shares in the cash segment.

Sebi, in its order, had also alleged that RIL violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules by entering into a well-planned operation with its appointed agents to earn undue profits from the sale of RPL shares in both the cash and the F&O segment.

Further, the regulator had alleged that the company manipulated the settlement price of the November 2007 RPL Futures contract by dumping a large number of RPL shares in the cash segment during the last 10 minutes of trading on November 29, 2007.

The execution of the fraudulent trades affected the price of the RPL securities in both cash and F&O segments and harmed the interests of other investors, Sebi had stated.

It was alleged that Navi Mumbai SEZ and Mumbai SEZ financed the whole manipulation scheme by funding the 12 entities.