Hearing of Sebi’s appeal against RIL: SC does a U-turn

The Supreme Court on Wednesday did a U-turn and decided to hear in chambers — and not in open court — the Sebi’s petition seeking a review of its August 5 judgment that had directed the market regulator to share certain documents with Reliance Industries.

The company claims these records will exonerate it and its promoters from criminal prosecution initiated in a case related to the alleged irregularities in the acquisition of its shares between 1994 and 2000.

A Bench led by Chief Justice Uday Umesh Lalit and justices J.K. Maheshwari and Hima Kohli while recalling its September 29 order directed the Registry to list the review petition “by normal mode i.e., through circulation” on October 19.

In its short order, the judges stated that it had on September 29 directed the listing of the review petition in open court. “However, on minute perusal of the contents of the application seeking open court hearing, we do not deem it appropriate to list the review petition in open court and we are of the view that the same should be listed by way of circulation,” it said while rejecting the Sebi’s application for an open court hearing.

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So far, Sebi has not shared the three documents -the two legal opinions by former SC judge BN Srikrishna and the former ICAI president YH Malegam’s report which examined the irregularities — that the SC had asked it to share “forthwith”, thus prompting RIL to file a contempt petition against the market watchdog and its authorised representative Vijayan A. The RIL’s contempt petition is yet to be heard.

Sebi has denied RIL’s request to share the “privileged” documents because under the Sebi (Settlement Proceedings) Regulations, the accused company had no right to seek information from it, the stand that was rejected by the apex court in August.

Chartered accountant S Gurumurthy had filed a complaint with Sebi in 2002 alleging fraud and irregularities by RIL, its associate companies and their directors/ promoters, including Mukesh Ambani and his wife, Nita; Anil Ambani and his wife, Tina; and 98 others in the issue of two preferential placement of non-convertible debentures in 1994. Sebi had alleged that RIL along with Reliance Petroleum had “circuitously funded the acquisition of its shares” in violation of Sections 77 and 77A of the Companies Act, 1956 and the market regulator’s then takeover code, among various other regulations.