Amended notice to Reliance Industries on insider trading

New Delhi, Nov 23 ( India’s markets watchdog has issued an amended notice to Reliance Industries Ltd asking why it should not be barred from accessing the stock markets under rules governing fraudulent and unfair trade practices.

The show cause notice has been issued in the matter relating to alleged insider trading in the shares of now defunct Reliance Petroleum, which had since merged with Reliance Industries, led by billionaire industrialist Mukesh Ambani.

The notice issued by the investigation department of the Securities and Exchange Board of India (SEBI) further asks why directions should not be issued to bar the company from buying, selling and dealing in any security — directly or indirectly.

The original show cause notice was issued April 29.

“Reliance Industries Ltd has always abided by all the rules and regulations of SEBI and, hence, has neither violated any provision of insider trading nor acted in any manner so as to attract provisions under Section 11(i), 11 (B) and 11(4) of the SEBI Act, 1992,” said a company spokesperson.

“We have, accordingly, submitted our detailed reply to SEBI and have not received any further communication in this regard,” the spokesperson said in a statement.

In a written reply to the Rajya Sabha in March last year, then minister of state for finance, Pawan Kumar Bansal, had said the markets watchdog had initiated an examination into the matter of alleged insider trading in shares of Reliance Petroleum.

The matter purportedly pertained to the sale of shares of Reliance Petroleum by the parent company in November 2007 in two instalments of 2.54 percent and 1.47 percent each to raise Rs.40.23 billion.

Reliance Industries subsequently said in a disclosure that the sale of shares was conducted by transactions through the stock exchanges and had helped to further broadbase the shareholding pattern.