Did Reliance Industries get away lightly in the unlawful gains case?
More punitive action was needed against the company and the management, say experts
Latest News — Securities and Exchange Board of India (Sebi) on Friday delivered its verdict in the decade-old unlawful gains case involving the country’s second-biggest company, Reliance Industries. The capital market regulator has directed the Mukesh Ambani-led company to disgorge (give up) Rs 447 crore, with interest of 12 per cent per annum since November 2007, it made “illegally”.
Besides the high interest levied, the only punitive action is a one-year ban from dealing in the futures and options (F&O) segment by the company. So has the company gotten away lightly?
Governance firm In Govern’s Managing Director Shriram Subramanian says that the punitive action should have been stricter.
“Sebi needs to be more tough and proactive in such cases. It has taken almost 10 years to come out with this order, which doesn’t contain any penalty. This could set a wrong precedent for companies and market participants who brazenly violate regulations. Banning the company from the F&O segment will not have any impact on the company. Apart from the disgorgement amount, there has to be a penalty to serve as a deterrent to all market participants,” he said.
JN Gupta, former executive director, Sebi, and founder of proxy advisory firm SES, says that besides the company, those running the show should also be held responsible.(read more…)