RPL, NSE co-location cases: Wait for SAT verdict continues

Even as the Securities Appellate Tribunal (SAT) has been hearing cases and passing orders post relaxation in the lockdown, the tribunal has reserved its order in some key cases — including those relating to Reliance Industries (RIL) and the NSE co-location case — for over eight months now. Legal experts who spoke to The Indian Express raised concerns over the fact that some key cases which will have a bearing on the stock markets and minority shareholders and whose orders are being awaited have been reserved by the SAT for a long time now. SAT did not reply to an email sent on Monday by The Indian Express. In the case of alleged fraudulent trading in the Fand O space in the securities of Reliance Petroleum (RPL) — where the Securities and Exchange Board of India (Sebi) had passed its order in March 2017 and directed RIL to disgorge Rs 4470000000 along with interest and barred RIL and 12 of its promoter group entities from dealing in equity derivatives — while RIL appealed against the Sebi order in SAT and the final hearing got concluded in February 2020, SAT has not passed its order and reserved it for more than eight months . The RPL case has been hanging fire for the last 13 years. RIL had sold 4.1% of its stake in RPL. However, to prevent a plunge in the RPL share price, the equity was apparently sold first in the futures market and later in the spot market. The crux of the Sebi notice is the company was aware there would be a sale of shares in the spot market and hence, its sales in the futures market before that amounted to insider trading. Even in the NSE co-location case, while the final hearing in the case relating to appeals filed by the NSE, Ravi Narain, Chitra Ramakrishna against the Sebi order, got concluded on March 5, SAT has not passed its final order. In May 2019, coming down heavily on the National Stock Exchange (NSE) for alleged lapses in high-frequency trading offered through its co-location facility, Sebi directed the bourse to disgorge around Rs 624.890000000 and barred it from accessing the market for funds for the next six months. The markets regulator also asked two of NSE’s former CEOs — Ravi Narain and Chitra Ramkrishna — to disgorge 25% of their respective salaries drawn during a certain period. They have also been prohibited from “associating with a listed company or a market infrastructure institution or any other market intermediary for a period of five years”, Sebi said in its order. After the raging Covid pandemic forced the Centre to enforce a nationwide lockdown in March-end, SAT did not come out with any judgement or order during April. While it passed three judgments in May, work started slowly and several orders were passed by SAT during October. Currently, the tribunal has a Presiding Officer and two members.