Sebi to look into alleged ‘insider trading’ by RIL

RIL, Grasim refute IGF allegations

ENS ECONOMIC BUREAU

MUMBAI, JANUARY 7: Mumbai-based Investor Grievances Forum (IGF) has asked market regulator Securities & Exchange Board of India to probe whether Reliance Industries has indulged in insider trading and unfair trade practices while selling its 10.05 per cent stake in L&T to Grasim.

Addressing a news conference on Monday, IGF president Kirit Somaiya alleged that just prior to selling its stake to Grasim, RIL picked up extra 3 per cent stake in L&T at a lower price and later sold the same shares to Grasim at a premium.

However, a Reliance spokesperson categorically denied the allegations relating to any insider trading with reference to sale of L&T shares to Grasim. The group had an investment in L&T shares over a decade and has complied with all applicable laws, rules and regulations, the spokesperson added. A Grasim spokesperson also said there was no violation of any Sebi regulations in the deal and the group has adhered to all norms in this regard.

Reacting to the IGF’s allegations, market regulator Sebi said that it has to ascertain the facts and look into the allegations.

Says Sebi chairman D.R. Mehta: “We will look into it and seek information from concerned parties including Reliance, and brokers if needed.”

In a complaint filed with Sebi chairman Mehta, Somaiya said: “We have been given to understand that the total holding of Reliance Group in L&T was approximately 6.62 per cent and that the balance shares of 10.05 per cent were acquired by the Reliance Group just prior to their deal with Grasim.”

“This has resulted in massive profiteering by Reliance as their purchases were at Rs 150 (average price) whereas their deal stuck at Rs 306 per share. Sebi should probe into alleged breach of insider trading and prohibition of fraudulent and unfair trade practices regulations by Reliance,” Somaiya said.

Somaiya had earlier made an issue of the deal between RIL and Birla and demanded that the ‘back-door entry’ of AV Birla Group on the board of L&T should be prevented and Grasim should make an open offer to the small shareholders at the same price at which it acquired 10.05 per cent stake in L&T from RIL.