Stock market regulator, the Securities and Exchange Board of India (SEBI) has imposed penalties on Reliance Industries Limited (RIL), its Chairman and Managing Director Mukesh Ambani, and two other entities for alleged manipulative trading in the shares of erstwhile Reliance Petroleum (RPL) back in November 2007.
Fines of Rs 25 crores and Rs 15 crores have been imposed on RIL and Ambani, respectively.
Besides, Navi Mumbai SEZ has been asked to pay a penalty of Rs 20 crores, and Mumbai SEZ has been directed to pay Rs 10 crores.
The case pertains to sale and purchase of RPL shares in the cash and the futures segments in November 2007. The order said any manipulation in the volume or price of securities always erodes investor confidence in the market when investors find themselves at the receiving end of market manipulators.
“In the instant case, the general investors were not aware that the entity behind the above F&O segment transactions was RIL. 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,” the order said.
While noting that execution of manipulative trades affects the price discovery system itself, the adjudicating officer said, “I am of the view that such acts of manipulation have to be dealt sternly so as to dissuade manipulative activities in the capital markets.”