RPL case: Sebi fines Reliance Industries, Mukesh Ambani, two other entities
New Delhi: Regulator Sebi on Friday imposed penalties on Reliance Industries Ltd, its Chairman and Managing Director Mukesh Ambani as well as two other entities for alleged manipulative trading in the shares of erstwhile Reliance Petroleum Ltd (RPL) back in November 2007.
Fines of Rs 25 crore and Rs 15 crore have been imposed on Reliance Industries Ltd (RIL) and Ambani, respectively. Besides, Navi Mumbai SEZ Pvt Ltd has been asked to pay a penalty of Rs 20 crore and Mumbai SEZ Ltd has been directed to pay Rs 10 crore.
The case pertains to sale and purchase of RPL shares in the cash and the futures segments in November 2007. This followed RIL's decision in March 2007 to sell 4.1 per cent stake in RPL, a listed subsidiary that was later merged with RIL in 2009.
In a 95-page order, Sebi's Adjudicating Officer B J Dilip said any manipulation in the volume or price of securities always erodes investor confidence in the market when investors find themselves at the receiving end of market manipulators.
"In the instant case, the general investors were not aware that the entity behind the above F&O segment transactions was RIL. The execution of the... fraudulent trades affected the price of the RPL securities in both cash and F&O segments and harmed the interests of other investors," he said in the order.
While noting that execution of manipulative trades affects the price discovery system itself, the adjudicating officer said, "I am of the view that such acts of manipulation have to be dealt sternly so as to dissuade manipulative activities in the capital markets."
There was no immediate comment from RIL on the matter.
On March 24, 2017, Sebi had ordered RIL and certain other entities to disgorge over Rs 447 crore in the RPL case. In November 2020, the Securities Appellate Tribunal (SAT) dismissed the company's appeal against the order.
At that time, RIL had said it would challenge the tribunal's order in the Supreme Court.
Apart from ordering disgorgement of money, Sebi had in March 2017 also prohibited RIL from dealing in equity derivatives in the F&O segment of stock exchanges, directly or indirectly, for one year.
As per the order passed on Friday, Sebi said RIL had entered into a scheme of manipulative trades in respect of the sale of its stake in RPL.
However, before undertaking sale transactions in the cash segment, RIL fraudulently booked large short positions in the RPL November futures through 12 agents with whom it had entered into an agreement to circumvent position limits for a commission payment, it added.
"As a result, RIL fraudulently cornered nearly 93 per cent of open interest in RPL November Futures, when the said 12 agents took short positions in F&O Segment on its behalf," the order said.
The funding for the margin payments by the agents was provided by Navi Mumbai SEZ Pvt Ltd and Mumbai SEZ Ltd, it added.
"A common person connected with RIL had placed orders in the cash segment on behalf of RIL and in the F&O segment on behalf of the agents.
"On the date of settlement of RPL November Futures, i.e., on November 29, 2007, RIL sold 1.95 crore RPL shares on NSE cash segment in the last 10 minutes of trading resulting in fall in the prices on the cash segment, which artificially depressed the settlement price of RPL November Futures.
"This resulted in profits on the huge short positions held by the agents in RPL November Futures and the said profits were transferred back to RIL by the agents as per prior agreement. The above strategy undertaken by RIL has resulted in manipulation of settlement price of RPL November Futures and prices of RPL shares in the cash segment," the order said.
Regarding Ambani, the order said that being the RIL managing director, he was "responsible for the manipulative activities of RIL".
"I am of the view that listed companies should exhibit highest standards of professionalism, transparency and good practices of corporate governance, which inspires confidence of the investors dealing in the capital markets.
"Any attempt to deviate from such standards will not only erode the confidence of the investors but also affect the integrity of the markets... the transactions executed by noticees were structured and executed in such manner so as to escape the notice of regulatory authorities, investors as they were not in public domain.
"Therefore, I conclude that the said scheme of manipulation was deceptive and against the interest of the securities markets," the adjudicating officer said.
The noticees are RIL, Ambani, Navi Mumbai SEZ Pvt Ltd and Mumbai SEZ Ltd.
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
Tata-Airbus helicopter facility shining example of partnership in high-end manufacturing: Rajnath
Kolar (Karnataka) (PTI): Defence Minister Rajnath Singh on Tuesday said the investment into H-125 helicopter programme is "anticipated" to cross Rs 1000 crore, and create a number of jobs, and called it a "shining example" of mutually beneficial partnership with friendly countries in high-end manufacturing sector.
He was speaking at the inaugural ceremony of the final assembly line of H-125 helicopters here.
Prime Minister Narendra Modi and French President Emmanuel Macron virtually inaugurated the Airbus H125 light utility helicopter Final Assembly Line at Tata‑Airbus' facility at Vemagal Industrial Area in this district from Mumbai.
Singh, accompanied by his French counterpart Catherine Vautrin, congratulated Tata Advanced System and Airbus Helicopters on the inauguration of the project and recalled their earlier association as well.
"This project is a shining example of mutually beneficial partnership with friendly countries in high-end manufacturing sector," Singh said.
"The H-125 program investment is anticipated to exceed Rs 1000 crore and is likely to create direct and indirect employment opportunities for our skilled and hard working younger generation," he said.
Renowned for its exceptional reliability, versatility, and outstanding performance under diverse operating conditions, the H-125 has proven to be one of the most effective and trusted single-engine helicopters globally, he said.
He recalled that Tata Advanced Systems and Airbus had earlier joined hands for a project in Gujarat's Vadodara for the C-295 aircraft, which he described as a symbol of how Tata in particular and India in general can collaborate with international OEMs to contribute to the vision of a stronger India.
The Defence minister said "Make in India" and self-reliance have been the cornerstone of India's economic policy since 2014.
Singh recalled that this policy initiative was launched by PM Modi, under which India is committed to achieving self-reliance in critical technology and the manufacturing of high-end products and equipment through mutually beneficial partnerships.
"For more than a decade, India has been charting industrial development through large-scale infrastructure building, capital infusion in important sectors through a number of incentive schemes on the one hand, and providing a level playing field for facilitating investment on the other," he said.
He added that it has also been the government's focus to support small and medium industries and strengthen the startup ecosystem in particular. Overall, the focus has been on holistic industrial development, which not only caters to domestic demand but also addresses the needs of other countries.
Highlighting reforms in the defence sector, Singh said these measures have augmented the contribution of the private sector in the defence industrial ecosystem.
According to him, historically, Indian defence production was largely public sector-oriented due to requirements of high capital investment and long gestation periods, resulting in the private sector's contribution being far less than desired.
However, with reforms such as the corporatisation of ordnance factories, establishment of defence industrial corridors, and other initiatives to raise the private sector's share in total defence production, it now stands at almost a quarter of the country's total defence production.
Defence exports have also increased manifold, placing India among the top exporters in the world, he said.
Singh said the growth trajectory has given a massive boost to MSMEs and ancillary sectors, which have grown to more than 16,000 in number, with many foreign companies sourcing components from Indian MSMEs.
He invited companies to deepen the partnership through meaningful technology transfer and offer platforms to meet the security needs of other countries as well.
Union Civil Aviation Minister K Rammohan Naidu, who also attended the event said the H125 final assembly line set up by Tata and Airbus marks a defining moment for India's aerospace sector, calling it "a proud symbol of rising confidence in India's high-precision aerospace capabilities."
He described defence and civil aviation as "two strategic pillars of the Indo-French partnership" and said the new facility would reinforce "a single integrated aerospace ecosystem" by assembling both civil and defence variants.
Noting that India has risen from the 10th to the third largest civil aviation market in just 11 years, Naidu asserted that the country now has "the market, the export potential, the policy ecosystem, the skilled workforce and the strategic global partnerships to emerge as a rotary-wing manufacturing hub".
"The future of rotary aviation in South Asia will be designed, manufactured, certified, maintained and exported from India," he said, adding that the country is "not just flying high, but flying past all horizons" under the Make in India and Viksit Bharat 2047 visions.
Tata Advanced Systems CEO and MD Sukaran Singh said in this facility here, "we will start building helicopters without any government or defense orders."
"However, we will be ready to supply the defense forces as and when they want. The first helicopter will fly out this facility by mid 2027."
