India's Supreme Court Orders 2.5 Billion-Rupee Refund to Reliance, Overturning 2020 SEBI Fraud Order
Updated
Updated · Reuters · May 29
India's Supreme Court Orders 2.5 Billion-Rupee Refund to Reliance, Overturning 2020 SEBI Fraud Order
9 articles · Updated · Reuters · May 29
India's Supreme Court told SEBI to refund 2.5 billion rupees ($26.32 million) to Reliance Industries, reversing a tribunal ruling that had upheld the regulator's fraud findings.
The court said breaching derivatives position limits alone does not prove fraud, and that hedging remains a legitimate risk-management tool without any legal requirement for a perfect 1:1 hedge.
The case stems from Reliance's 2007 sale of about 5% of Reliance Petroleum, when 12 entities took short futures positions whose profits and losses ultimately accrued to the company.
SEBI's 2020 order had called that structure manipulative, saying it bypassed position limits, cornered the market and influenced settlement prices, and had ordered Reliance to repay 4.47 billion rupees to investors.
The ruling narrows the line between regulatory breaches and market abuse in India, signaling that SEBI faces a higher burden of proof when alleging manipulation.
With its fraud case overturned, can India's market regulator still effectively police the country's most powerful corporations?
Did the Supreme Court just give corporations a playbook to mask market manipulation as 'aggressive hedging'?