The Supreme Court will hear in the open court the Sebi’s petition seeking review of its August 5 judgment that had directed the market regulator to share certain documents with Reliance Industries (RIL), which the company claims will exonerate it and its promoters from criminal prosecution initiated in a case related to the alleged irregularities in acquisition of its own shares between 1994 and 2000.
Sebi has denied RIL’s request to share the “privileged” documents on the grounds that under the Sebi (Settlement Proceedings) Regulations, the accused company has no right to seek information from it, a stand that was rejected by the apex court in August.
A Bench comprising Chief Justice UU Lalit and justices JK Maheshwari and Hima Kohli, in its short order, said: “Considering the facts and circumstances on record and the submissions advanced in the review petition, we deem it appropriate to allow application for listing of the instant petition in open court.” It posted the matter for hearing on October 12.
Meanwhile, a Bench comprising justices Sanjiv Khanna and JK Maheshwari on Friday recused from hearing RIL’s petition seeking to initiate contempt proceedings against Sebi for failing to give certain documents to the company, as directed on August 5 by the Bench then led by Chief Justice NV Ramana.
So far, Sebi has not shared the three documents — the two legal opinions by former SC judge BN Srikrishna and former ICAI president YH Malegam’s report which examined the irregularities — that the SC had asked it to share “forthwith”, thus prompting RIL to file a contempt petition against the market watchdog and its authorised representative Vijayan A.
RIL’s contempt petition stated that there was no justification for Sebi to continue to resist the production of these documents, and that its continued withholding of the same constituted “wilful disobedience, contumacious disregard and defiance” of SC’s orders.
Sebi had obviously “misadvised itself” in assuming that its compliance with the judgment is a matter of discretion, it said, adding that the market watchdog’s conduct is liable to be dealt with heavily and be given the maximum penalty prescribed under law, it said.
According to the company, it had sent a notice to Sebi stating that if the documents were not received by it by August 18, it would assume that the market regulator has no intention of complying with the orders passed by SC and the company would take further consequential action as advised.
Chartered accountant S Gurumurthy had filed a complaint with Sebi in 2002 alleging fraud and irregularities by RIL, its associate companies and their directors/promoters, including Mukesh Ambani and his wife, Nita; Anil Ambani and his wife, Tina; and 98 others, in the issue of two preferential placement of non-convertible debentures in 1994. Sebi had alleged that RIL along with Reliance Petroleum had “circuitously funded the acquisition of its own shares” in violation of Sections 77 and 77A of the Companies Act, 1956 and the market regulator’s then takeover code, among various other regulations.