RIL gets insider trading notice

Mumbai, Nov. 23: Reliance Industries Ltd on Monday denied that it had indulged in insider trading and nor did it violate any provisions of insider trading or acted in any manner so as to attract provisions under Section 11(i), 11 (B) and 11(4) of Sebi Act 1992.

The Reliance statement came in the wake of the amended show cause notice sent by the Securities and Exchange Board of India (Sebi) in October asking why it shouldn’t be barred from accessing the stock markets under the rules on fraudulent and unfair trade practices. The show cause notice was issued in connection with the alleged insider trading in the shares of Reliance Petroleum which had since merged with Reliance Industries. In November 2007 RIL sold these shares to raise Rs 4,023 crore. It had sold the shares in two tranches.

According to the investigative department of Sebi, RIL and 12 of its entities had made a gain of Rs 513 crore and notice asked why RIL should not disgorge this manipulative gain. Sebi issued an amended notice in October after its first show cause notice in April as RIL did not turn up for hearings in the intervening months.

The Reliance spokesman has said that it has already sent a detailed reply to Sebi and the regulator has not got back to RIL.

This amended order issued in October and being publicised now just as Reliance makes a bid for the US-based Lyondell Basell Industries is not likely to effect its bid according to industry sources. LBI has the world largest capacity in polymers (11.3 million tonnes), the fourth largest ethylene capacity (6.5 million tonnes) and has a significant presence in chemicals and oxy-fuels besides owning two refineries in Houston and France. Its revenues are in the vicinity of $300m annually.