The Supreme Court sets aside parts of a Securities Appellate Tribunal (SAT) order that had upheld SEBI’s directions against Reliance Industries Ltd (RIL) in connection with RIL’s 2007 sale of Reliance Petroleum Ltd (RPL) shares. According to reports, the SAT had dismissed RIL’s appeal against a SEBI order dated March 24, 2017, by a 2:1 majority decision. The SAT order resulted in a disgorgement direction of about ₹447 crore. RIL challenged the SAT decision before the Supreme Court, which partly allowed RIL’s appeal.
The Supreme Court finds that the SAT’s majority verdict contains an “egregious error” on the issue of fraud under Regulations 3 and 4 of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP). At the same time, the court indicates agreement with the SAT’s majority observations on the question of penalty. The matter relates to the trading and sale of RPL shares in November 2007, and the Supreme Court’s ruling modifies the earlier directions connected to disgorgement.
