SEBI Fines Mukesh Ambani RIL with Rs.

40 crores for Manipulative trading in 2007

 
2nd January 2021: India’s market regulator Securities and Exchange Board of India (SEBI)
on January 1 imposed Rs. 25 crore penalty on Reliance Industries Ltd (RIL) and a fine of Rs.
15 crores on billionaire Mukesh Ambani, for allegedly violating share-trading rules about 13
years ago. The regulator has also fined two other entities, Navi Mumbai SEZ Pvt Ltd. with Rs
20 crores and Mumbai SEZ with Rs 10 crores.
 
The regulator has issued penalty in regard to sale and purchase of Reliance Petroleum Ltd.
(RPL) shares in cash and F&O segment in November 2007.

The order passed by SEBI says RIL and its agents operated to allegedly earn undue profits
from the sale & purchase of shares in Reliance Petroleum Ltd and Ambani was liable for
alleged manipulative trading. Official statement by Reliance and Mukesh Ambani is yet to be
made.
 
The order is related to trading in the scrip of RPL, that merged with RIL in 2007. At that
time, board of RIL has approved the operating plan for the year 2007- 08. Later, in the same
year the company decided to sell 4.1% of stake in RPL. For undertaking the transactions, RIL
appointed 12 agents.
 
SEBI found that the appointed agents took short positions in F&O Segment on behalf of the
company, while RIL undertook transactions in RPL shares in the cash segment. In the next
month, RIL undertook multiple transactions in the cash segment and through agents in the
F&O Segment. The short positions in F&O segment continuously exceeded the proposed
sales of shares in the cash segment.
 
https://www.latestlaws.com/latest-news/sebi-fines-mukesh-ambani-reliance-industries-
for-40-crore-over-manipulative-trades/
Section 32A of Insolvency and Bankruptcy Code (Amendment) Act, 2020- “Valid” says
SC
20 Jan 2021: To achieve the main objective of the “Insolvency and Bankruptcy Code” to
reduce the delays in litigation and serve time bound insolvency resolution process, Supreme
Court upheld two changes in Insolvency Law while hearing 41 petitions challenging the
Insolvency and Bankruptcy Amendment passed in March 2020.
One of such change says that new owners can’t be held liable or the actions of previous
management and homebuyers will continue to comply with the requirement of minimum
threshold to initiate Corporate Insolvency Resolution Process against real estate firm.
Constitutionality of Section 32A
SC upheld section 32A of “Insolvency and Bankruptcy Code”. Section 32A provides once the
resolution plan has been approved by NCLT (National Company Law Tribunal) corporate
debtor shall not be prosecuted for an offence committed prior to commencement of
Insolvency process the Corporate Debtor shall not be prosecuted for an offence committed
prior to commencement of CIRP (Corporate Insolvency Resolution Process). With the SC
upholding the validity of Sec 32A, lot of  
 In its judgement, the Supreme Court says,
·         It was important for the IBC to attract bidders who would offer reasonable and
fair value for the corporate debtor to ensure the timely completion of corporate
insolvency resolution process (CIRP).
·         Such bidders, however must also be given protection from any misdeeds of the
past since they have no connection with it.
·         Such protection, must also be extended to the assets of the corporate debtor,
which is attractive for potential bidders and help them in assessing and placing a fair
bid for the company, which helps the banks to recover their unpaid loans.

Source:https://www.latestlaws.com/latest-news/sc-upholds-validity-of-insolvency-and-
bankruptcy-code-amendment-act-2020-rejects-homebuyer-s-plea/

JYOTI KHURANA