Reliance Industries falls over 2% on Futures & Options Trading Ban

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New Delhi | Published: March 27, 2017 1:15:48 PM

Due to the turmoil on Reliance Industries Limited after getting banned from Equity derivatives trading, the stock of RIL (Reliance Industries Limited) witnessed a major drop of more than 2% and continued to trade weak.

Reliance Industries challenged the SEBI verdict and said has full confidence in judicial process and will take this to Securities Appellate Tribunal (SAT)

Due to the turmoil on Reliance Industries Limited after getting banned from Equity derivatives trading, the stock of RIL (Reliance Industries Limited) witnessed a major drop of more than 2% and continued to trade weak. The sentiments of investors were bearish in the pre open session on National Stock Exchange where the orders were placed more on negative bets.

Today RIL opened at Rs 1267.55 making a high of Rs 1278.50 and a low of Rs 1256.10 on BSE. Till 12 noon it reported a trading volume of more than 37 lakhs equity shares. the regulator Securities and Exchange Board of India ordered a probe in Reliance Industries and Fined it for fraudulent and unfair trading practices on account of irregularities in Reliance Petroleum Limited in November 2007. Reliance Industries was penalized by SEBI under sections 11, 11B of the SEBI Act, 1992, Section 12A of Securities Contracts(Regulations) Act, Read with Act 11 of SEBI( Prohibition of Fraudulent and Unfair trade practices relating to securities Market) Regulations, 2003.

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SEBI said that in March 2007 the Board of Directors of Reliance Industries decided to raise resources by offloading its 5% of Equity Shares of the scrip Reliance petroleum Limited (RPL). Reliance Industries decided to undertake the transactions in cash segment of RPL and hired 12 other agents to operate on its behalf on the futures segment of RPL, SEBI said. Between November 1′ 2007 and November 6′ 2007 Gujarat Petcoke and Petro products Pvt. Ltd., Aarthik Commercials Pvt. Ltd, LPG Infrastructure India Pvt. Ltd., Relpol plastics products Pvt. Ltd., Fine tech Commercial Pvt. Ltd., Pipeline India Infrastructure Pvt. Ltd., Motech Software pvt Ltd., Darshan Securities Pvt. Ltd., Relogistics (India) pvt. Ltd., Relogistics (Rajasthan) Pvt. Ltd., Vinamara Universal Traders Pvt. Ltd., Dharti Investment and Holdings Pvt. Ltd., took substantial position in November Futures Contract of RPL.

As a result of this the holdings in derivatives contract of RPL reached 95% on November 6′ 2007 of the Market Wide Position Limit (MWPL) thereby inviting upon no further increase in Open Interest (OI) position as per rules pertaining to derivatives trading. These irregularities led SEBI to start a probe in the matter. The price-volume trends in the cash market and Future & Option segment were analyzed, as a part of the detailed investigation.

Reliance Industries challenged the SEBI verdict and said it has full confidence in judicial process and will take this to Securities Appellate Tribunal (SAT). Recently Reliance Industries touched nine years high on March 8’2017 at Rs1326.75.

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