Reliance, the $64 billion conglomerate controlled by India's richest man, Mukesh Ambani, rejected the ruling by the Securities and Exchange Board of India and said it would appeal to the Securities Appellate Tribunal.
In its ruling SEBI alleged that before Reliance Industries sold a 5 percent stake in Reliance Petroleum in November 2007, when it was a separately listed company, it took derivative short positions through third parties in Reliance Petroleum shares, to profit from an ensuing fall in the price following the sale.
SEBI, in a 54-page ruling, said Reliance had as a result made a profit of 5.1 billion rupees and ordered it to forfeit 4.5 billion rupees plus interest within 45 days.
With the interest rate set by SEBI at 12 percent annually since Nov. 29, 2007, the total amount due to be paid could amount to more than 12 billion rupees, according to Reuters calculations.
Besides imposing the fine, SEBI said it would bar Reliance and the third parties involved from trading in derivatives for one year.
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