New Delhi: The Supreme Court on Friday granted significant relief to Reliance Industries Limited (RIL) in the long-running Reliance Petroleum Limited (RPL) futures trading case.
A Bench of Justices JB Pardiwala and R Mahadevan set aside SEBI’s findings that RIL had committed fraud and manipulated the market in 2007. The Court also removed the regulator’s direction asking the company to disgorge Rs 447.27 crore.
At the same time, the Court upheld a separate penalty of Rs 25 crore imposed on the company. It also directed SEBI to refund Rs 250 crore already deposited by Reliance.
Background of the Case
The case relates to trades in the shares and futures contracts of Reliance Petroleum Limited in November 2007.
At that time, RPL was a listed subsidiary of Reliance Industries, with RIL holding around 75% stake. The company planned to sell nearly 22.5 crore shares, representing about 5% of its holding.
Following an investigation, SEBI alleged that Reliance had used 12 entities to build large short positions in RPL futures contracts while simultaneously selling shares in the cash market.
SEBI's Allegations
According to SEBI, RIL sold a large number of RPL shares in the final minutes of trading on November 29, 2007.
The regulator claimed this strategy lowered the settlement price of RPL futures contracts, helping Reliance earn unlawful gains.
Based on these findings, SEBI in 2017 directed Reliance to disgorge Rs 447.27 crore along with interest and barred the company and related entities from trading in equity derivatives for one year.
Legal Battle and Verdict
Reliance challenged the order before the Securities Appellate Tribunal (SAT), which upheld SEBI’s decision in 2020.
The matter later reached the Supreme Court. The apex court has now overturned the fraud findings and the disgorgement order, giving major relief to Reliance.
However, it retained the Rs 25 crore penalty imposed by SEBI’s adjudicating officer, bringing partial closure to one of India’s most closely watched securities market cases.
