SEBI orders Mukesh Ambani & Reliance Industries to pay penalty

India’s market regulator ordered billionaire Mukesh Ambani and his conglomerate Reliance Industries Ltd. to pay a combined penalty of 400 million rupees ($5.5 million) for allegedly violating share-trading rules about 13 years ago. In its order dated Jan. 1, the Securities and Exchange Board of India said Reliance and its agents operated to allegedly earn undue profits from the sale of shares in Reliance Petroleum Ltd., a former unit, in both the cash and futures markets. Reliance Industries needs to pay 250 million rupees and Ambani, the chairman, is liable for the alleged manipulative trading, Sebi said.

After investigation, Sebi observed in 2017 that Reliance, along with 12 unlisted trading houses, carried out unlawful transactions in the shares of Reliance Petroleum. They bought stock between March and November of 2007, and then the company took short positions -- bets that the share price would fall -- in November futures before starting to sell the stock in order to push down the price, according to Sebi. Reliance Petroleum merged with Reliance Industries in 2009.