Reliance Industries lodges a contempt complaint against SEBI

22 Aug 2022 , 09:50 AM

Reliance Industries has filed a contempt petition with the Supreme Court against the Securities and Exchange Board of India (SEBI), accusing it of “wilful disobedience” with regard to an order from the high court ordering the capital market regulator to grant the nation’s most valuable company access to certain documents in a two-decade-old stock allotment case.

The action is being taken as SEBI prepares to seek the Supreme Court for a review of the August 5 judgement that favoured the corporation in gaining access to the necessary papers. Reliance has also submitted a letter to the Supreme Court’s registrar asking for an immediate hearing of the case on August 22 before Chief Justice of India NV Ramana.

On August 5, the Supreme Court ordered SEBI to deliver copies of Justice (retired) BN Srikrishna’s first and second views as well as the report of YH Malegam to Reliance over a case that had been pending for 20 years.

These records pertain to a 2002 SEBI complaint S Gurumurthy made against Reliance, its affiliated businesses, and directors. According to the lawsuit, RIL and other group enterprises sponsored the fraudulent allocation of 120 million equity shares by Reliance to entities ostensibly associated with the promoters.

Reliance requested copies of the three documents in two letters to Sebi following the Supreme Court’s decision. In response, SEBI stated that it was consulting its senior counsel for legal guidance.

On February 24, 2011, SEBI sent a show-cause notice to the Reliance promoters in response to the 2002 complaint, alleging a breach of takeover rules. Sebi brought a case against Reliance Industries in 2020 before the SEBI special court. However, because there was a delay in responding to the 2002 complaint, the court dismissed SEBI’s argument.

SEBI filed a petition with the Bombay High Court following the special court’s denial decision. Reliance also made a request for access to the three documents SEBI was relying on to the Bombay High Court. After the Bombay High Court rejected its argument, Reliance appealed to the Supreme Court, which decided in its favour.