Supreme Court Rejects SEBI's Appeal against SAT Order Exonerating Mukesh Ambani in 2007 Case
SN Thyagarajan (Bar  and  Bench) 11 November 2024
The Supreme Court on Monday dismissed an appeal filed by the Securities Exchange Board of India (SEBI) against Securities Appellate Tribunal's (SAT) decision to quash a penalty against chairman of Reliance Industries Limited (RIL) Mukesh Ambani over allegations of manipulating Reliance Petroleum Limited's (RPL) stock in 2007. 
 
A Bench of Justices JB Pardiwala and R Mahadevan said, "There is no question of law raised in the case. Dismissed."
 
The Court however agreed to hear SEBI's appeal in so far as it challenged the SAT's decision to grant relief to RIL. The Court has listed the matter for hearing on December 2. 
 
Senior Advocate Arvind Datar, who appeared for SEBI urged the Court to issue notice on the appeal since it pertained to the vicarious liability of the Managing Director.
 
He added that there are two conflicting decisions of the SAT on this issue of law. The Court however refused to entertain the plea in so far as it related to Ambani.
 
Senior Advocate Harish Salve represented Ambani while Senior Advocate Ritin Rai represented RIL. 
 
In December 2023, the SAT overturned the SEBI's order to penalise Mukesh Ambani and his company, RIL, in relation to the 2007 RPL stock manipulation case.
 
The dispute pertained to the sale of a 5 per cent stake in RPL, a listed subsidiary that was later merged into RIL in 2009. In 2021, SEBI imposed a penalty on Ambani and two other entities for allegedly manipulating RPL's shares during this sale. (Read: SEBI Imposes Rs70 Crore Penalty on Reliance Industries, Mukesh Ambani for Fraudulent Trading in F&O of RPL in 2007
 
SEBI found Ambani and RIL guilty, imposing a penalty of Rs25 crore on RIL and Rs15 crore on Ambani , Rs20 crore on Navi Mumbai SEZ and Rs10 crore on the Mumbai SEZ. (Read: SAT Quashes SEBI's Rs70 Crore Penalty Order against Mukesh Ambani, RIL and 2 SEZs
 
A total of four appeals were filed against SEBI’s order in SAT. 
 
SAT eventually ruled that Ambani cannot be held accountable for all legal breaches by corporate entities. It stated that evidence from board meeting minutes clearly showed that the trades in question were executed by two other without Ambani’s knowledge. As a result, the tribunal concluded that no liability could be assigned to him and quashed the fines against both him and RIL.
 
 
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mrsanjeevni
7 months ago
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