ASEBI order imposing Rs 25 crore penalty on industrialists Mukesh Ambani, Anil Ambani and other entities, over non-compliance with takeover norms in case of Reliance Industries, was set aside by the Securities Appellate Tribunal (SAT) on Friday. The order followed Ambanis’ appeal in the appellate tribunal against the directive of Securities and Exchange Board of India (SEBI).
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“We find that the appellant has not violated … The SAST (Substantial Acquisition of Shares and Takeovers) Regulations. The imposition of penalty upon the appellant is without any authority of law. Consequently, the impugned order cannot be sustained and is quashed,” the SAT said in its 124-page order.
The case is related to alleged failure to comply with takeover rules. SAT noted that the penalty amount following SEBI‘s order was deposited by the appellants. It directed the markets regulator to refund the Rs 25 crore amount within four weeks.
SEBI had slapped a fine totalling Rs 25 crore on Mukesh Ambani, Anil Ambani, Nita Ambani, Tina Ambani and other entities in April 2021 for non-compliance with takeover norms in a Reliance Industries case dating back to 2000.
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The SEBI order had stated that RIL promoters and Persons Acting in Concert (PAC) failed to disclose the acquisition of more than 5 per cent stake in the company way back in 2000. Mukesh Ambani and Anil Ambani had split the business empire built by their father Dhirubhai Ambani in 2005.
Sebi noted that 6.83 percent stake was acquired by RIL promoters together with PACs consequent to exercise of option on warrants attached with non-convertible secured redeemable debentures were in excess of the ceiling of 5 per cent prescribed under the takeover regulations.
Thus, the obligation to make a public announcement about acquiring the shares arose on January 7, 2000. This was the date on which the PACs were allotted RIL equity shares on exercise of warrants issued in January 1994, the order had mentioned.
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However, Sebi had found that the promoters and PACs did not make any public announcement for acquiring the shares. Since the promoters and PACs did not make any public announcement for acquiring shares, it was alleged that they violated the provisions of the takeover regulations.
