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Reliance Industries' scrip drops 1.40% after Sebi penalty order

Sebi has ordered RIL to pay Rs 447 crore to it in 45 days.

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The shares of Reliance Industries (RIL) dropped 1.40% after market regulator Securities and Exchange Board of India (Sebi) asked it to deposit Rs 447.47 crore with it within 45 days in a nine-year-old case. 

The shares, which closed at Rs 1,286.20 apiece, were down 1.31% in early trade or Rs 1,269.40 over the previous close. 

Apart from the over Rs 400 crore fine, Sebi has also asked it to deposit an interest of 12% with it annually from November 29. 2007 onwards till the date of the payment. 

Sebi said RIL off-loaded approximately 5% of its holdings of equity shares of Reliance Petroleum (the company was later merged with RIL and doesn't exist as an independent entity anymore).

The markets regulator said RIL undertook the transactions in the cash segment of RPL in November 2007, and through 13 front companies, took positions in the futures segment of RPL. Between November 1, 2007 adn November 6, 2007, Sebi said, the parties took substantial positions in the November Futures contract of RPL. 

On November 6, 2007, eventually, the holding in derivatives contracts RPL reached 95% of the market-wide position limit (MWPL), thereby, inviting upon it a restriction of no further increase in open interest (OI) position as per extant rules pertaining to trading in the derivative segment. This led to an investigation by SEBI into the matter.

Prior to the said SCN, there was another SCN dated April 29, 2009 issued to Noticee No. 1, which was modified subsequently by corrigendum dated October 8, 2009, both of which were superseded by the SCN dated December 16, 2010.

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