India’s market regulator SEBI fined Rs 25 crore on well-known industrialist Mukesh Ambani, his wife Neeta Ambani, brother Anil Ambani, his wife Tina Ambani and other family members for irregularities in the shareholding of Reliance Industries Limited. The fine has been imposed in the case related to Reliance Industries in 2000 for not complying with the takeover rules.
The Securities and Exchange Board of India (SEBI), in its 85-page order, said that RIL promoters and PACs (people working together) had more than 5 percent stake in the company in the year 2000, according to news agency PTI’s report. Failed to disclose about the acquisition. Mukesh and Anil separated in 2005 by splitting the business. As per the order, RIL promoters acquired 6.83 per cent stake in the company in 2000. This acquisition was done by converting 3 crore warrants issued in 1994.
According to SEBI, RIL promoters, along with PAC, acquired a 6.83 per cent stake by exercising the option to convert the warrants associated with non-convertible secured debentures into shares. This acquisition was over the 5 percent limit prescribed under the regulation. In this matter of order, he was required to publicly declare the share acquisition on January 7, 2000. On the same date, RIL’s equity shares were allotted to PAC on the basis of warrant issued in 1994.
However, SEBI observed that the promoters and the PAC did not make any public announcement about the share acquisition. So these people have violated the takeover rules. Under SEBI regulations, the promoter group has acquired more than 5 percent voting rights in any financial year, which requires it to make an open offer to minority shareholders. SEBI said fines have to be paid jointly and severally to the people and units concerned.