The Supreme Court has set aside Sebi’s fraud findings against Reliance in the 2007 RPL futures trading case.
The court also quashed the order directing RIL to disgorge ₹447.27 crore with interest.
However, it upheld a ₹25 crore penalty linked to disclosure violations.
Reliance Gets Supreme Court Relief in 2007 RPL Futures Trading Case
Top court overturns Sebi and SAT findings, orders return of ₹250 crore deposited by Reliance
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Reliance Industries Limited (RIL) received major relief from the Supreme Court on Friday after the court overturned market regulator Sebi’s findings of fraud and market manipulation in the 2007 Reliance Petroleum Limited (RPL) futures trading case.
A bench of Justices J B Pardiwala and R Mahadevan set aside Sebi’s 2017 order, which had earlier been upheld by the Securities Appellate Tribunal (SAT) in 2020. The apex court also cancelled the direction asking RIL to disgorge ₹447.27 crore along with 12% annual interest.
The court further ordered that the ₹250 crore deposited by RIL during the pendency of the proceedings be returned to the company. However, the bench retained a ₹25 crore penalty imposed on the company for violating disclosure requirements related to position limits under a 2001 Sebi circular.
Case Linked To 2007 Share Sale
The dispute dates back to March 2007 when Reliance Industries decided to raise funds for its projects by selling around 5 per cent stake in its listed subsidiary, Reliance Petroleum Limited. The company planned to offload nearly 22.5 crore shares, believing the stock was overvalued at the time.
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Between November 6 and November 29, 2007, RIL sold more than 20 crore RPL shares in the cash market on the NSE and BSE. A significant portion of these shares was sold during the final minutes of trading on the expiry day of RPL futures contracts.
Sebi later alleged that Reliance used 12 agents to build large positions in RPL futures and manipulated settlement prices in the derivatives market. The regulator claimed this violated provisions of the Sebi Act and Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) regulations governing fraudulent and unfair trade practices.
Supreme Court’s Observation
While delivering its verdict, the Supreme Court said the SAT had committed a serious error in upholding Sebi’s findings on fraud under PFUTP regulations. The bench concluded that the evidence did not justify the charge of fraudulent conduct against RIL.
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The ruling brings an end to one of Sebi’s longest-running market manipulation cases involving the Mukesh Ambani-led conglomerate.