Live Help
Want to know more
Enter the details and we'll call you soon

Name :

Company Name :

City :

Mobile No. :

Email id :

  

Thank you for your details



Our Executive will reach you shortly.

A new Generation of research begins with a new Research Platform. Try New Taxmann.com
Your Session Will Expire in   seconds.
If you do not wish to log-out, choose 'Let me continue'
Reset SessionCancel Session
 

SAT upholds SEBI’s order to disgorge unlawful gains against Reliance Industries

November 17, 2020[2020] 121 taxmann.com 188 (SAT - Mumbai)
19 Views

SEBI: Where appellant RIL decided to sell 5% of its shareholdings in RPL and it took route with help of its agents to perpetuate scheme in cornering a substantive portion of market-wide position limit in relevant RPL Futures Contract, same was manipulation of market and such manipulation could not be treated simply as a position limit violation and it was undoubtedly a pre-planned strategy of manipulation, with all actions done by a single entity, i.e. appellant RIL, and hoisted upon an unsuspecting market, inducing other market participants to deal with a vitiated market; since position limit violation had been achieved through a dubious, manipulative scheme or device, such an act would squarely fall within provisions of SEBI Act and PFUTP Regulations and SEBI's order to disgorge unlawful gains was justified

• Appellant RIL decided to sell 5% of its shareholdings in RPL which roughly worked out to 22.5 crore shares - 12 agents of appellant under an agreement, who took an aggregate net short positions of 9.92 Cr shares in Nov, 2007 in RPL Futures on Stock Exchange as a hedge against proposed sale by appellant in cash segment - SEBI found that appellant employment of 12 entities to take separate short positions was not a hedging strategy as claimed by appellant but was a pre-planned fraudulent scheme for cornering positions and manipulation of Nov. 2007 RPL Futures market to make unlawful gains; that sale of 1.95 Cr RPL shares in cash segment by RIL during 10 minutes of trading on Nov. 29, 2007 had been done for depressing last half an hour weighted average price (which is settlement price for Nov. 2007 RPL Futures) to make gains on 7.97 Cr outstanding short positions in Nov. 2007 RPL Futures was manipulative as contemplated under PFUTP Regulations; and that appellant made unlawful gains of Rs 513 Crore by this fraudulent and manipulative strategy/pattern of trading - Hence, SEBI passed order directing appellant to disgorge amount of unlawful gains along with interest

• On appeal to SAT, held that -

-   Route taken by appellant RIL with help of other appellants/Noticees who perpetuated scheme in cornering a substantive portion of market-wide position limit in range of 62% to 93% (depending on dates) in November RPL Futures contract is manipulation of market, unknown to players therein. Such manipulation could not be treated simply as a position limit violation. It is undoubtedly a pre-planned strategy of manipulation, with all actions done by a single entity, RIL, and hoisted upon an unsuspecting market, inducing other market participants to deal with a vitiated market.
-   12 entities (agents) in picture were distinct entities and, hence, for exchange surveillance mechanism, there was no way to capture that these entities were indeed agents of any particular entity - Position limit violation had been achieved through a dubious, manipulative scheme or a device, such an act would squarely fall within provisions of SEBI Act and PFUTP Regulations.
-   SEBI's order to disgorge unlawful gains along with interest was justified
read more

taxmann.com
Payment
Best view in 1140 x 768