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Business News/ Market / Stock-market-news/  SAT adjourns hearing on RIL-Sebi case to 16 April
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SAT adjourns hearing on RIL-Sebi case to 16 April

SAT agrees to hear the case on 16 April, as RIL counsel could not be present due to medical emergency

RIL has been fighting against Sebi in the insider trading case and the regulator’s exclusion of the company from the consent mechanism. Photo: Priyanka Parashar/MintPremium
RIL has been fighting against Sebi in the insider trading case and the regulator’s exclusion of the company from the consent mechanism. Photo: Priyanka Parashar/Mint

Mumbai: The Securities Appellate Tribunal (SAT) adjourned the hearing in the insider trading case against Reliance Industries Ltd. (RIL) to 16 April as the company’s senior counsel could not make it on Tuesday.

RIL has been fighting against market watchdog Securities and Exchange Board of India (Sebi) in the insider trading case and the regulator’s exclusion of the company from the consent mechanism.

Since RIL senior counsel Janak Dwarkadas could not be present in the courtroom due to a medical emergency, the company sought adjournment, following which the tribunal agreed to hear the matter on 16 April.

SAT has been hearing the seven-year-old case of alleged insider trading arising from the merger of Reliance Petroleum Ltd. (RPL) with RIL in 2007.

During the previous hearing on 24 February, the tribunal had sought clarifications from Sebi on the impact of the new consent mechanism norms in the ongoing case against RIL. SAT presiding officer JP Devadhar had asked Sebi senior lawyer Darius Khambata to give the regulator’s stance on the effect of the new regulations, which came into force with retrospective effect from April 2007.

Sebi had notified the new consent norms on 9 January, after issuing the draft consent norms in May 2012. The consent mechanism allows companies and individuals to settle disputes with Sebi by paying a sum without admission or denial of the alleged wrongdoing and by repaying any ill-gotten gains.

RIL, prior to the merger of RPL with itself, allegedly short-sold a 4.1% stake in RPL valued at Rs4,023 crore to prevent a slump in the stock. RIL sold RPL shares first in the futures market and later in the spot market, covering the share sale in the futures market, it was alleged.

In 2008, Sebi initiated a probe into the matter and in 2010 initiated quasi-judicial proceedings and said it had found that RIL had booked a profit of Rs513 crore in the futures segment through this deal worth Rs4,023 crore. Sebi argued that the company was aware of the sale of shares and sold futures ahead of that, amounting to insider trading, and sent a show-cause notice to the company.

RIL had challenged the Sebi show-cause notice in December 2010. Following this, Sebi ordered a probe and found that RIL had violated insider trading norms. Though RIL moved Sebi for a consent settlement, the regulator did not entertain the application, forcing RIL to move the SAT. PTI

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Published: 18 Mar 2014, 07:34 PM IST
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