The Securities Appellate Tribunal (SAT) on Friday set aside a Sebi order that imposed a Rs 25 crore penalty on industrialists Mukesh Ambani, Anil Ambani and other entities for non-compliance with takeover norms in Reliance Industries case.
The order came after Ambani's appealed in the appellate tribunal against the capital markets regulator's directive.
"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 appellate tribunal said in its 124-page order.
The case pertains to alleged failure to comply with takeover rules.
Noting that the penalty amount following Sebi's order was deposited by the appellants, SAT directed the markets regulator to refund the amount of Rs 25 crore within four weeks.
In April 2021, Sebi levied a fine totaling Rs 25 crore on Mukesh Ambani, Anil Ambani, Nita Ambani, Tina Ambani and other entities for non-compliance with takeover norms in a Reliance Industries case dating back to 2000.
Nita is the wife of Mukesh Ambani and Tina is the wife of Anil Ambani.
In its order, Sebi had stated that RIL's 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.
In 2005, Mukesh and Anil had split the business empire built by their father Dhirubhai Ambani.
Sebi noted that 6.83 per cent 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.
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.
