Reliance Industries has filed a contempt plea against the Securities and Exchange Board of India (Sebi) before the Supreme Court, alleging ‘wilful disobedience’ pertaining to an order of the apex court that had directed the capital market regulator to give the country’s most-valued company access to certain documents in a two-decade-old stock allotment case.
The move comes at a time when Sebi plans to file a review petition in the apex court against the August 5 order that had ruled in favour of the company on accessing the relevant documents. Reliance has also written a letter to the registrar of the Supreme Court, seeking an urgent hearing of the matter before the Chief Justice of India, NV Ramana, on August 22.
On August 5, the Supreme Court had directed Sebi to share with Reliance copies of the first and second opinions given by Justice (retired) BN Srikrishna and the report of YH Malegam on a case dating back two decades.
These documents relate to a 2002 complaint filed by S Gurumurthy with Sebi against Reliance, its associate companies and directors. The complaint alleged Reliance had fraudulently allotted 120 million equity shares to entities purportedly connected with the promoters, and that the allotment had been funded by RIL and other group firms.
After the Supreme Court’s ruling, Reliance wrote twice to Sebi seeking copies of the three documents. Sebi responded saying it was seeking legal advice from its senior counsel.
“It is submitted that, in spite of petitioner’s (Reliance) repeated communications, Sebi has to date not complied with the judgment of this Hon’ble Court and furnished copies of the three documents,” Reliance said in its letter addressed to the registrar of the Supreme Court. “Sebi’s conduct in this matter, ex facie, constitutes wilful disobedience of the order of this Hon’ble Court. The direction to present the documents forthwith admits no ambiguity, and it is indeed regrettable — though not uncharacteristic — that Sebi, a regulator, is conducting itself in a manner destructive of the rule of law.”
Contents of the letter were described by the people familiar with the matter. “Any suggestion that Sebi is entitled to ignore and disregard orders of this Hon’ble Court while it is ‘seeking advice from (its) counsel’ is not only entirely without legal foundation, but an affront to the dignity of this Hon’ble Court,” said the letter.
Mails sent to Reliance and Sebi remained unanswered until the publication of this report. “Sebi has a constitutional right to file a review petition within 30 days of the Supreme Court order. The window is still open,” said a person familiar with the development.
Acting on the 2002 complaint, Sebi issued a show-cause notice to the promoters of Reliance on February 24, 2011, alleging violation of takeover regulations. In 2020, Sebi filed a complaint before the Sebi special court seeking prosecution of Reliance Industries. The court, however, rejected Sebi’s plea as there was a delay in acting on the 2002 complaint.
After the rejection order by the special court, Sebi moved to the Bombay High Court. Reliance also approached the Bombay High Court, seeking access to the three documents Sebi was relying upon. Its plea was rejected by the Bombay High Court, following which Reliance approached the Supreme Court that ruled in its favour.
