The Securities Appellate Tribunal (SAT) on Monday asked the Securities and Exchange Board of India (Sebi) to file within one month a reply opposing the admission of a petition by Reliance Industries Ltd (RIL) against the capital market regulator’s refusal to settle a case of alleged insider trading through consent.
The case will come up for hearing on 14 June.
Under Sebi’s consent procedure, companies can seek to settle cases with the market regulator after paying certain charges. A consent isn’t an admission of guilt or wrongdoing.
The case relates to alleged violation of insider trading norms in sale of shares of the company’s erstwhile subsidiary Reliance Petroleum in 2007.
SAT’s directive came after Sebi counsel Darius Khambata said that under the norms the regulator cannot be compelled to settle a case through consent. Khambata said the appeal of RIL against Sebi’s refusal to settle the case was, therefore, not maintainable.
“The high-powered committee recommendation for rejection of consent is based on facts as it found that the entities involved had dealt in shares in the last 10 minutes of trade on derivative desk and made a profit of Rs.530 crore,” Khambata said.
Janak Dwarkadas, counsel representing RIL, argued that the company had not been given “adequate inspection of documents” relied upon by Sebi in the case. “Second, the manner in which its consent application has been rejected by the regulator is not correct,” he said.
RIL has been deprived of an opportunity to present its case before the internal committee of Sebi for consent, said Dwarkadas.
“We have been denied the opportunity to apply for consent procedure.”
RIL has also challenged recent changes made by the regulator to norms governing settlement of cases through the consent procedure.