SEBI imposes Rs 11 crore fine on Reliance Petroinvestments

SEBI imposes Rs 11 crore fine on Reliance PetroinvestmentsIndia’s capital market regulator, the Securities Exchange Board of India (Sebi) has imposed a pentalty on Reliance Petroinvestments (RPIL) for insider trading in IPCL shares in 2007.

Reliance Petroinvestments is a subsidiary of Reliance Industries (RIL) headed by Mukesh Ambanni. According to the order, RPIL generated a profit of about Rs. 3.82 crore through the trades related to insider trading between February and March 2007. It is believed that the insider trading occurred before the announcement about dividend declaration and the merger of a group.

The order form the regulator said that the deal was funded through an interest-free loan by a wholly-owned unit of Reliance Industries. IPCL was acquired by RIL in 2002 under a government disinvestment initiative. IPCL was listed as a separately listed firm before it was merged with RIL. Reliance Petroinvestments now has a period of 45 days to pay the penalty, the regulator said in an order that was published on Thursday.

“RPIL being the promoter having control over the company holding 46 per cent shares of IPCL is inherently expected to have access to price sensitive information. The company being in such a position it is unacceptable that it was not aware of such major/ important decisions of the company IPCL," a part of the Sebi order read.