Securities Appellate Tribunal (SAT) Clears Mukesh Ambani and Reliance Industries Ltd (RIL) in 2007 RPL Case, Overturns Sebi's Penalties

In a significant development, the Securities Appellate Tribunal (SAT) has overturned the Securities and Exchange Board of India's (Sebi) order imposing fines on billionaire Mukesh Ambani and his firm, Reliance Industries Ltd (RIL), related to the 2007 Reliance Petroleum Ltd (RPL) case.

Sebi's 2021 order slapped heavy penalties on Mukesh Ambani, RIL Chairman, and two other entities associated with the alleged share manipulation of erstwhile Reliance Petroleum Ltd. However, all entities involved in the case appealed the order before SAT, leading to the quashing of the penalties imposed on Ambani and his company. The other two entities in question are Navi Mumbai SEZ and Mumbai SEZ.

Sebi's penalties in January 2021 included a ₹25 crore fine on RIL, ₹15 crore on Mukesh Ambani, ₹20 crore on Navi Mumbai SEZ Pvt Ltd, and ₹10 crore on Mumbai SEZ Ltd, all related to the RPL case.

The roots of the case trace back to 2007, revolving around the sale and purchase of Reliance Petroleum Limited (RPL). Sebi alleged a breach of takeover regulations in the sale of shares worth ₹12 crore, claiming that the promoters exceeded the regulated 5 percent stake limit.

The SAT's decision to quash Sebi's order against Mukesh Ambani hinged on the tribunal's acknowledgment that the RIL Chairman cannot be held responsible for every alleged contravention of the law by corporate entities. The tribunal pointed to evidence, including minutes of RIL board meetings, demonstrating that the impugned trades were conducted without Ambani's knowledge by two senior officials. SAT emphasized that Sebi failed to prove Ambani's involvement in executing the trades, leading to the overturning of fines against him and RIL.

This ruling comes as a relief for Mukesh Ambani and RIL, putting an end to the legal implications arising from Sebi's penalties.

(With inputs from PTI)