Reliance Petroinvestments Ltd, an RIL group entity, has approached Securities Appellate Tribunal (SAT) against Rs 11 crore penalty imposed by Sebi in an over six-year-old insider trading case.
The appeal, which would be heard by the Tribunal on Wednesday, challenges a Sebi order passed on May 2 in an case of insider trading in the shares of IPCL, an erstwhile subsidiary of Reliance Industries Ltd (RIL).
Pronouncing Reliance Petroinvestments Ltd (RPIL) guilty of violating the insider trading regulations with regard to its dealings in shares of Indian Petrochemicals Corp Ltd (IPCL) in early 2007, Sebi had said that RPIL made profits of over Rs 3.82 crore through these trades.
After taking into account the quantum and nature of the violations, Sebi imposed a penalty of Rs 11 crore on RPIL, which was listed as one of the promoter entities by IPCL itself in its regulatory filings as on March 31, 2006.
Sebi had asked the company to pay the penalty within 45 days to the account of "SEBI Penalties Remittable to Government of India".
Once a subsidiary RIL, IPCL used to be a separately listed entity of the group, but was later merged with RIL and delisted from the stock exchanges.
Sebi said in its order that its investigations into charges of insider trading norm violations by RPIL showed that the company was having control over IPCL as "promoter having control over the company with the total shareholding of approximately 46 per cent".
Further, RIL was shown as a 'person(s) acting in concert' with RPIL with regard to the shareholding of IPCL, Sebi said.
Sebi said it conducted an investigation in the trading of the shares of IPCL during the period from February 22, 2007 to March 08, 2007.
In the same case, Sebi earlier this year passed another order wherein it dropped the charges of violations of insider trading norms in IPCL shares against Manoj Modi and his wife.
Modi is known as a close confidante of RIL chief Mukesh Ambani and held some senior positions at group entities in the past.
Sebi said that the charges of insider trading violations could not be proved against Modi.
Sebi's probe into the matter showed an irregular trading pattern in IPCL shares during the period under review, when two key announcements were made by the company - one about an interim dividend payment and another regarding the amalgamation of IPCL with RIL.
IPCL originally used to be a government-owned entity and was sold to RIL group during a disinvestment exercise.