Sebi clean chit to Reliance in L&T case

The Securities and Exchange Board of India (Sebi) has given a clean chit to — Reliance Industries Limited (RIL), its CMD Mukesh Ambani and vice-chairman and MD Anil Ambani — from charges of insider trading in the stock of Larsen and Toubro (Land T) prior to selling their Land T holding to Grasim Industries Limited (GIL) in 2002. Sebi chairman G. N. Bajpai, who headed a three-member committee, said in his January 21 order, “It is proved that unpublished price sensitive information was not received by RIL or Ambanis as insiders of Land T, and as such, they cannot be held liable for violation of Regulation 3 of Sebi’s Insider Trading norms”. The committee, which comprised of RBI deputy governor K. J. Udeshi, Sebi whole-time board member A. K. Batra besides Sebi chairman, held that RIL and Ambani brothers had not violated the provisions of Sebi (Prohibition of Insider Trading) Regulations, 1992, as alleged in the show cause notice dated February 18, 2003. Sebi received a complaint on January 7, 2002 regarding the sale of 10.05% Land T shares by RIL to GIL, wherein, it was alleged that Reliance Group had increased their holding in Land T from 6.62% in March 2001 to 10.05% in November 2001, prior to their deal with GIL. RIL sold its stake to GIL at a rate of Rs 306.6 per share thereby making huge profit since they had purchased additional equity shares at an average price of Rs 150 per share from the open market, the complaint alleged. Based on the complaint, Sebi initiated investigations into the allegations of insider trading.