The Securities and Exchange Board of India (SEBI) has rejected consent applications of nearly 150 entities, including Reliance Industries, for violations of various rules, since May last year (2012).
Following criticism that the consent plea - under which an entity under investigation pays a penalty without admitting or denying guilt - was allowing many offenders to get away lightly, the regulator modified the rules for considering such applications.
While rejecting about 150 applications, SEBI said the decisions were in line with the revised consent plea rules. Under the new rules, insider trading, front-running, failure to make an open offer to shareholders of a listed firm, and manipulation of net asset value (NAV) of mutual funds can no longer be settled through a consent plea.
For the first time, SEBI has named the various associate entities of RIL facing charges of insider trading.
These firms include:
* Vinamra Universal Traders
* Reliance Ports & Terminals
* Relogistics (India)
* Relpol Plastic Products
* Darshan Securities
* Fine Tech Commercials
* LPG Infrastructure (India)
* Gujarat Petcoke and Petroproducts Supply
* Relogistics (Rajasthan)
* Dharti Investment & Holdings Limited
* Aarthik Commercials
* Mo Tech Software.
In November 2007, RIL’s associate firms had short sold Reliance Petro futures days before RIL sold a 4.1 per cent stake in Reliance Petro. When the Reliance Petro share price crashed, so did the futures' price, and RIL's associate firms covered their short positions in Reliance Petro futures at lower levels, netting a handsome profit. Media reports estimate the gains from this trade about Rs. 500 crore.
The list of rejected pleas also includes violation of insider trading rules by Reliance Petro investments, Manjoj Modi & Smita Modi, in the erstwhile Indian Petrochemicals Chemicals which was taken over by Reliance Industries.
Other well - Known firms whose consent pleas have been rejected included GMR Holdings, Valecha Engineering, India Infoline, Religare, Sanwaria Agro, HSBC Invest direct.
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