SC to hear Sebi’s review petition in RIL case on 19 October

Mumbai: The Supreme Court will on 19 October hear the Securities and Exchange Board of India’s (Sebi) petition, seeking review of the apex court’s 5 August order that directed the regulator to share certain documents with Reliance Industries Ltd.

On 29 September, Sebi had filed a review petition after the apex court on 5 August clarified that the regulator must provide access to certain documents to Reliance Industries that were relied upon in a probe pertaining to a share acquisition matter.

A bench led by UU Lalit said the direct listing of the review petition in an open court is recalled and the registry is directed to list the review petition by normal mode, through circulation on 19 October.

The regulator had refused to entertain RIL’s request to share the privileged documents on the grounds that under Sebi (Settlement Proceedings) Regulations the accused company has no right to seek information from it. The top court, however, rejected the regulator’s stand.

As per the order, the Supreme Court held that “Sebi as a regulator has a duty to act fairly while initiating any proceedings against parties. It is not to circumvent rule of law and has to show fairness. We allow this petition and direct Sebi to furnish the document sought by Reliance Industries”.

Additionally, the court had said that the approach of Sebi in failing to disclose the documents also raises concerns of transparency and fair trial.

As per the SC order, a complaint was filed on 21 January 2002 by S Gurumurthy with Sebi against RIL, its associate companies and its directors, alleging that they fraudulently alloted 12 crore shares of RIL to entities purportedly connected with the promoters of RIL, which were funded by the company and other group companies.

It was alleged that the company and its directors were in violation of Section 77 of the Companies Act, 1956. Based on the said complaint, the Sebi appointed an investigating officer to inquire into the aforesaid complaint. Accordingly, a report was submitted by the said investigating officer on 4 February, 2005.

A petition was filed by Reliance Industries before the Bombay High Court in 2021 seeking access to certain documents that were relied upon by Sebi in a matter.

In April, Reliance Industries had moved the top court after the Bombay High Court rejected its petition to gain access to documents that Sebi relied upon in an investigation against it in a matter of 2002.

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