'No Violation': SAT junks Sebi's penalty on Ambanis
SAT) set aside the Securities and Exchange Board of India (Sebi) order imposing a penalty of ₹25 crore on Mukesh Ambani, Anil Ambani, Reliance Industries Holdings and eight other entities for the alleged violation of takeover rules. The tribunal directed Sebi to refund the ₹25 crore penalty within four weeks, while also pulling up the regulator for what it called the «inordinate delay» in proceedings.
«We find that appellants (Reliance Industries Holdings) have not violated Regulation 11 (1) of SAST (Substantial Acquisition of Shares and Takeovers) Regulations, 2011,» SAT presiding officer Justice Tarun Agarwala said in the ruling on Friday. «The imposition of penalty upon the appellant is without any authority of law.»Show Cause Issued after 11 Years: SAT «Consequently, in view of this, (the) Sebi order cannot be sustained, (and is) therefore quashed and appeal allowed.» The case relates to alleged irregularities in the preferential issue of non-convertible secured redeemable debentures and shares to the entities associated with the promoters of Reliance Industries Ltd (RIL).
In January 2000, RIL had issued 120 million equity shares to 38 allottee entities. The allotment was made consequent to the exercise of the option on warrants attached with non-convertible secured redeemable debentures issued in 1994.
The regulator alleged that the 6.83% stake acquired by RIL's promoters together with persons acting in concert (PACs) in 2000 exceeded the ceiling of 5% prescribed in the takeover code. Sebi in its order alleged that promoters of RIL had failed to make a public announcement regarding the acquisition of shares and deprived shareholders of their statutory right to exit the company and therefore breached takeover
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