RIL banned from accessing equity derivatives: SEBI

In a massive blow to Reliance Industries (RIL), the market regulator, Securities and Exchange Board of India (SEBI), has banned the Company from accessing the equity derivatives market for a year, effective March 24, 2017. 

SEBI also commanded the company to demit the profits created by the violation of SEBI rules and regulations on unfair trade practices while selling its stakes in its former unit, Reliance Petroleum (RPL).

On the contrary, in a statement to the media, RIL stated that the company will challenge SEBI's order in the Securities Appellate Tribunal (SAT).

The Company has been accused of short sale of RPL stocks, ahead of the RPL and RIL amalgamation in 2007, and this will cost RIL a penalty of Rs 1,300 crore, calculated from a payback of Rs 447.27 crore, along with an annual interest of 12 per cent. While the calculated unlawful gain of RIL, as calculated by SEBI was Rs 513 crore.

The Company is said to have resorted to short sale to avoid a plunge in the RPL stocks ahead of the amalgamation. 

In 2008, SEBI had launched a probe into the matter, following quasi-judicial proceedings in 2010. While, in response RIL had applied for consent mechanism in 2010, later rejected by SEBI in the year 2012.However, SEBI completed the investigation in the matter in 2015, issuing a showcause notice to RIL. RIL is obligated to pay up the penalty within 45 days of the order.