Reliance Industries Ltd (RIL) on Thursday said it will appeal in the Securities Appellate Tribunal (SAT) against the Securities and Exchange Board of India’s (Sebi) penalty of ₹25 crore on its chairman and managing director Mukesh Ambani.
“There has been no violation of Regulation 11(1) of the Sebi Takeover Regulations and they have complied with applicable laws. An appeal will be preferred to the Securities Appellate Tribunal and they remain confident of vindicating their position,” RIL said in a filing with the Bombay Stock Exchange.
On Wednesday, the markets regulator had fined Mukesh Ambani, Anil Ambani, Kokilaben Ambani, Nita Ambani, Tina Ambani, Reliance Industries Holding, Reliance Realty and others in connection with failure to comply with the regulator’s takeover code regulations.
“Reliance Industries Limited (RIL) had issued debentures with convertible warrants in 1994 and allotted equity shares against the warrants in 2000. Sebi had issued a show-cause notice in February 2011 (more than 11 years after the acquisition of shares) to the then promoter and promoter group (in the year 2000), alleging violation of Regulation 11(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997,” RIL said.
In January 2020, the promoter stake in Reliance Industries increased by 6.83% after the conversion of three crore warrants issued in 1994. However, it was alleged that the promoter group failed to make an open offer in accordance with the regulations. According to the regulations, a promoter group acquiring more than 5% stake needs to make an open offer to minority investors within the financial year.
Sebi said that the promoter group and others in the case violated Regulation 11(1) of the takeover regulations. “In the event of failure to pay the said amount of penalty within 45 days of the receipt of this order, Sebi may initiate consequential actions including but not limited to recovery proceedings under Section 28A of the Sebi Act, 1992, for realization of the said amount of penalty along with interest thereon, inter alia, by attachment and sale of movable and immovable properties,” it said.
