SEBI Slaps $5.5 Million Fine On Ambani Brothers And RIL

Must Read

How To Leverage On Cold Calling to Help You Win Big In 2021

Cold calling is an old-fashioned sales strategy that involves sales representatives reaching out to prospective customers who have not...

Are You A Gaming Geek: ‘Five Commandments’ Before You Buy Video Games Online !

Does your day start with joysticks instead of coffee mugs? Or as a kid your best friends were the...

With Free Delivery and Zero Surge Pricing, What’s Swiggy Upto?

Be it fancy, hearty meals delivered at door-step or being the savior of late-night food cravings - Swiggy has...

The Ambani brothers might have to shell out a pretty penny as past mistakes have come back to bite!

The Securities and Exchange Board of India (SEBI) has fined Mukesh Ambani, Anil Ambani and 9 other individuals and entities for irregularities found in shareholding, a violation of the regulator’s takeover code regulations.

But, the irregularities are not recent. The Indian market regulator has slapped a combined penalty of a whopping Rs 40 crore ($5.5 million) on Ambani and his petroleum-to-tech conglomerate Reliance Industries Ltd. for the alleged violation of trade sharing rules going back 20 years ago!

Advertisements

The capital market regulator said that the promoters and persons acting in concert with RIL failed to disclose the acquisition of more than 5% stake in the company in 2000, something which would have triggered an open offer to RIL’s exiting public shareholders under the rules established by SEBI.

Apparently, RIL’s promoters acquired a 6.83% stake in the said company between March 1999 to March 2000, through the conversion of 3 crores warrants issued to them in 1994.

SEBI, in its order, mentioned that a promoting group with a stake more than that of 5%, under the existing rules, must offer minority investors an open offer within the continuing business year itself and because RIL failed to do so and in turn violated Regulation 11(1) of the adoption regulations, they must pay the penalty.

The Indian market regulator said that Reliance and its agents allegedly made undue profits from the cash and futures markets by selling shares in Reliance Petroleum Ltd, one of RIL’s former unit. Thus, Reliance Industries must shell out 25 crores given Mukesh Ambani is being held liable for practising manipulative trading.

SEBI ruled that the noticees, in the instant matter, have been alleged to have failed in making a public announcement to acquire shares of RIL and in doing so they have deprived their shareholders of their statutory rights/opportunity to exit from the target company. Thus, as the act breaches the provisions of takeover regulations, it makes the instant matter against the noticees grave.

Advertisements

Furthermore, SEBI also declared that if in the event the penalty amount is not paid within 45 days of the receipt of this order, the market regulator might initiate consequential actions that might include but not be limited to recovery proceedings under the section 28A of SEBI Act, 1992 by attachment and the sale of both movable and immovable properties.

The market regulator said that though it cannot evaluate the unfair gains or benefit the promoters have reaped by violating the adoption regulations, it is certain that RIL promoters have definitely robbed minority investors of their statutory rights.

Considering the net worth of Mukesh Ambani, the fine imposed by SEBI is like an effort to take a drop out of the ocean. The Ambani, however, has decided to appeal against the penalty imposed.

All in all, it now remains to be wow will Mukesh Ambani And RIL respond to these allegations. We will keep you updated on all future developments. Until then, stay tuned.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

The Price of JioPhone Next: Just ₹500 To Take The India Market By Storm

The jaw-dropping price of JioPhone Next seems quite unbelievable, especially at a time when the whole industry is struggling...

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded and unparalleled...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter, with a...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one of the...

More Articles Like This