HC wants RIL as a party in Sebi-CIC tiff

Written by fe Bureau | Mumbai | Updated: Dec 5 2012, 06:14am hrs
The Bombay High Court has directed that Reliance Industries (RIL) be made a party to the case between the Securities and Exchange Board of India (Sebi) and RTI activist-cum-lawyer Arun Agrawal who wants the regulator to disclose the names of the entities involved in the RIL insider trading case.

An SC bench comprising Justice DY Chandrachud and Justice AA Sayed observed that since the matter relates to a regulatory probe on RIL, the company should be given a chance to present its case. We might not ultimately accept what RIL says, but we need to hear what they say, said Justice Chadrachud, while posting the matter to December 19.

The capital market regulator has filed a petition in the Bombay High Court against an order passed by chief information commissioner Satyananda Mishra directing Sebi to disclose the names of entities involved in the RIL insider trading matter wherein the company is alleged to have made unlawful gains of around R500 crore.

The CIC order came following an RTI application filed by Agrawal. Interestingly, Sebi has questioned the rationale of public interest in the CIC order, saying that the information sought by Agrawal is related to an individual company and it is not clear what public interest will be served by such disclosures.

The appellant (Agrawal) under the guise of RTI is making a roving fishing enquiry... (The CIC) must demonstrate in its order that it is in public interest... It must give reasons, said senior advocate Jamshed Cama, appearing on behalf of Sebi. He further said Sebi will give him the complete details after the probe is over. Once the prosecution is over, we will give him the entire details, he said, adding that currently the investigation report is being evaluated by Sebi. The investigation has been done and the next step would be prosecution or penalty, he said.

Meanwhile, the court has directed the Sebi counsel to take instructions from the regulator if it can disclose the file notings and the underlying process of the consent route circular to the RTI applicant. The court's observations came after Agrawal highlighted the fact that there have been reports saying that RIL wants to settle the case by paying only R10 crore even though the alleged unlawful gains amount to R500 crore. Why should Sebi have a problem disclosing the underlying process on the basis of which it came out with the circular The RTI applicant has not challenged the framing of regulation so Sebi should not have any problem. This is not confidential, said Justice Chandrachud.