Sebi for action against RIL on share issue

Market regulator Securities and Exchange Board of India has asked the government to consider appropriate action against Reliance Industries for allegedly routing funds to dummy companies for buying large quantity of its shares in the year 2000.

Based on Retired Justice B.N. Srikrishna’s opinion on the issue after its own investigation, Sebi in a communication to the Corporate Affairs Ministry earlier this month said the matters of "irregular issue of privately placed debenture (PPD) IV and V by RIL" are being referred for "consideration and appropriate action."

"Justice Srikrishna has also opined that the manner, in which RIL has managed to fund the buying of its own securities, is really a matter for action by the authorities enforcing the provisions of the Companies Act viz. MCA," the communication said.

While no response could be obtained from the Ministry, Sebi officials declined to comment. Even RIL spokesperson did not give any comment immediately on the issue.

The Sebi probe relates to a complaint by S Gurumurthy alleging that the core of the fraud was the criminal misappropriation amounting to virtual smuggling out of RIL (through non convertible debentures) of 12 crore shares of the company in 2000 representing 11.38 per cent of the equity capital.