Why the Sebi-Reliance case is far from over

Even though the Securities Appellate Tribunal (SAT) has dismissed Reliance Industries' appeal against market regulator Sebi in an insider-trading case, the battle for the corporate house is far from over.
Even though theSecurities Appellate Tribunal (SAT) has dismissed Reliance Industries' appeal against market regulator Sebi in an insider-trading case, the battle for the corporate house is far from over. The SAT order said Sebi investigations have proved that RIL, in connivance with other entities related/connected to it, took short positions in the futures and options (Fand O) segments of the National Stock Exchange in the Reliance Petroleumscrip and sold around 200000000 shares, thereby making an illegal gain of Rs 513.120000000. Reliance had however argued that itwas not given a chance by Sebi to settle the case under a process called consent proceeding.The market regulator had tweaked its consent norms in 2012 and made them stricter by excluding serious offences, such as insider trading, from the settlement process. The SAT order comes after Sebirejected Reliance Industries' appeal to settle the case through consent proceedings wherina company pays a hefty fine without admitting wrongdoing or charges being investigated further. " ...there is no dispute that as on date Section 15JB (4) is in operation. Since Section 15JB(4) bars appeal against any order passed in consent proceedings, we have no option but to dismiss the appeal,"the SAT order said. According to a report in the Hindu BusinessLine, this is not the end of the road for Reliance because the appeal was dismissed purely on the basis of a newnew retrospective law, Section 15JB of the Sebi Act, which bars it from hearing any appeal against any order passed by Sebi in consent proceedings. This provision only came into force when Sebi tweaked the norms by passing an Ordinance promulgated by the UPA Government on 28 March, 2014. However if the ordinance is notconverted into an enactment of Parliament within six weeksfrom the reassembly of Parliament, it would cease to exist, thus implying that Sebi is yet to dispose of RIL's application for a disposal based on the 'consent' route and the original complaint against RIL will not be proceeded with until the company's 'consent request' is disposed off. As the report points out, the six weeks would end by 16 July and "anappeal against an adverse ruling on it can once again be judicially reviewed by SAT as the legal bar on hearing it would stand lifted," the Hindu BusinessLine report added. (Disclosure Firstpost anf Firstbiz are published by Network 18 Media and Investments, which is currently being acquired by the Reliance Group through an open offer).