sebi:ISD/IPCL/RPIL/AO/DRK-CS/EAD-3/359/25-13
Facts / Headnote
Penalty imposed on Noticee for insider trading violation
Provisions invoked
- s. 15
- s. 370
- s. 15G
- s. 15J
- s. 372
- s. 1B
Regulations relied on
- SEBI (PIT) Regulations, 1992 — 3
Parties
- Reliance Petroinvestments Ltd.
Holding
The Noticee, Reliance Petroinvestments Ltd., was held to be an 'insider' deemed connected with IPCL under Regulation 2(h) of the PIT Regulations by virtue of being under the same management as RIL under Section 370(1B)(iii) of the Companies Act, 1956, and was found to have traded in IPCL shares while in possession of unpublished price sensitive information in violation of Regulation 3 of the PIT Regulations. A penalty of Rs. 11,00,00,000 was imposed under Section 15G of the SEBI Act.
Full text
Page 2 of 17 declined by 3.79%. It is pertinent to add that the price of the scrip declined even after the announcement of the interim dividend by IPCL. However, in a divergence from the index, the scrip witnessed substantial price gain on March 8, 2007 and March 9, 2007 subsequent to the announcement of amalgamation of IPCL with Reliance Industries Ltd. (hereinafter referred to as “RIL”).
Page 3 of 17 Date/ Time Announcement 02/03/2007 14:28 To consider, inter alia, declaration of Interim Dividend on equity shares of the Company. The Company further informed the Exchange that the Company has fixed March 22, 2007 as 'Record Date' to determine the equity shareholders who would be eligible to receive the Interim Dividend if declared by the Board at its meeting scheduled on March 10, 2007. In the event of the Board deciding to pay
Page 4 of 17 • Mr Mukesh Ambani is the Chairman of IPCL and Chairman and Managing Director of RIL, therefore, in terms of clause (i) of Sub-section (1B) of section 370, of Companies Act, 1956, IPCL and RIL are deemed to be under the same management. • RPIL holds more than one-third of the total voting power of IPCL therefore, in terms of clause (iii) of Sub-section (1B) of section 370, of Companies Act, 1956, IPCL and RIL are deemed to be under the same management. • RIL holds the entire share capital of RPIL through two of its wholly owned subsidiaries, therefore, in terms of clause (iii) of Sub-section (1B) of section 370, of Companies Act, 1956, RPIL and RIL are deemed to be under the same management. • In view of above it was concluded that RPIL and RIL are deemed to be a connected persons in terms of Regulation 2(h) of PIT Regulations and therefore RPIL and RIL are 'insider' in terms of provisions of regulation 2(e) of PIT Regulations.
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Source: SecMarx — sebi:ISD/IPCL/RPIL/AO/DRK-CS/EAD-3/359/25-13. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.