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Reliance Petro under Sebi lens

New Delhi/Mumbai, March 18: The Securities and Exchange Board of India is probing allegations of insider trading in the shares of Reliance Petroleum Limited (RPL).

This was disclosed in the Rajya Sabha today by minister of state for finance P.K. Bansal in a written reply to a query of Samajwadi Party MP Amar Singh.

Singh had sought to know whether the government had taken action against the promoters and affiliates of Reliance Industries Ltd over what he described as “mammoth insider trading activities in the shares of Reliance Petroleum Ltd.”

On November 24, 2007, Mukesh Ambani’s Reliance Industries said it had raised Rs 4,023 crore by divesting 4.01 per cent of its stake in RPL.

While the actual date of the stake sale is not known, the shares of Reliance Petroleum had moved by a wide margin between late October and early November last year.

The RPL share had hit an all-time high of Rs 295 on November 1, though a rally in the counter started from late September when its share price was ruling at around Rs 165.

The counter also witnessed heavy volumes. On September 21, 2007, close to 2.89 crore shares were traded. The volumes hovered around these levels till October 30, when they shot up to 3.26 crore shares.

Trades touched 5.72 crore shares on November 1, jumping to 7.62 crore shares on November 6.

However, the volumes then came down sharply, following a bar on derivative traders by the stock exchanges from taking fresh positions in the RPL futures that also caused a crash in RPL share prices.

Since early November, huge positions were built in RPL futures that led to a breach in the prescribed marketwide position limit. This limit is 20 per cent of a company’s free float.

Sebi officials today refused to comment on the probe. “We have nothing to say on the subject,” an official said.

Reliance Industries in a statement said it and its group companies had complied with all rules and regulations and would cooperate and provide all necessary information to the authorities concerned.

Bansal’s statement had its impact on RPL share price.

After opening at Rs 157 and rising to a high of Rs 159.95, the share slipped after news of the Sebi probe came in.

It ended at Rs 152.95, a drop of 1.45 per cent over the last close.

As on December 31, 2007, a little over 75 per cent of RPL shares were held by the promoter group — Reliance Industries and Chevron India — while public shareholding was 24.62 per cent, including those held by financial institutions and mutual funds.

Earlier, the shares of Anil Ambani-run group companies were under focus after allegations that their share prices rose 8 to 37 per cent in a month before the RPower issue.

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