The Securities Appellate Tribunal (SAT) has sought clarification from the Securities and Exchange Board of India (Sebi) on whether the latter will consider the consent plea of Reliance Industries (RIL) if the matter is sent back to the capital market watchdog.
The tribunal, while hearing the seven-year old insider trading case, sought Sebi’s views since the regulatory framework for consent mechanism were tightened last year with cases related to insider trading being kept out of its purview. The tribunal has posted the matter for hearing on March 18.
On Monday, SAT presiding officer J P Devadhar asked Sebi counsel Darius Khambata to give the regulator?s stance on the effect of the new regulations, which came into force last month with retrospective effect from April 2007. The draft norms were issued in May 2012.
The development comes even as during an earlier hearing on January 6, Sebi had clearly stated that settling the RIL insider trading case through consent mechanism would be against public interest.
?…The person who is alleged to be in breach of the regulations or statutory provisions, which are designed to protect the public interest, will have no vested right either to insist upon Sebi to settling a dispute or enforcing compliance of the terms,? Khambata had said on January 6 during his submission.
SAT has been hearing the RIL case since 2010. The dispute dates back to 2007, when RIL was alleged of selling shares of its subsidiary Reliance Petroleum (RPL) in the derivatives (F&O) market and later merging the entity with RIL. Sebi had claimed that RIL was aware of the sale of shares and sold futures ahead of that ? a move that violated the insider trading norms. Through the dealings, RIL made a profit of Rs 513 crore.
Earlier, SAT had suggested that Sebi consider RIL?s consent application ? a process that allows companies and individuals to settle disputes by paying a sum without admission or denial of wrongdoing. Sebi, however, declined to consider an application by RIL to settle the case of alleged insider trading, leaving it to SAT to make a decision.
