RPL imbroglio: SEBI issues fresh showcause notice to RIL

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The Securities and Exchange Board of India (SEBI) has issued a fresh showcause notice to Reliance Industries (RIL) in the Reliance Petroleum Limited (RPL) case reports CNBC-TV18's Shreen Bhan quoting sources. The notice, dated October 8,  has been issued under Section 11 and 11B of the SEBI Act and Regulation 11 of Fraudulent and Unfair Trade Practises (FUTP).

SEBI has also made some amendments in paragraph 25 of the earlier showcause notice which was issued on April 29, 2009, following a probe into alleged insider trading in RPL shares in November 2007.

SEBI has asked why RIL shouldn't be prohibited from the securities' market and from buying and selling. "Why not disgorge proceeds from transacting in RPL shares," SEBI questions.

In response to the notice, an RIL official stated that the company always abided by the rules and regulations and had not violated insider trading provisions.

"We have not acted in a manner to attract violations under Section 11 and 11B," said RIL, adding that a detailed reply had been sent to SEBI but no further communication had been received.

Why fresh showcause?

It has been learnt that RIL didn't show up for the hearings between April and October, resulting in the issue of a fresh showcause notice. The reason for this fresh showcause notice lies on what transpired in that period between April and October and also whether SEBI actually had further data or evidence on the basis of which it has decided to go ahead as far as this fresh showcause is concerned.

For CNBC-TV18's Shreen Bhan's comments on the issue, watch video.