SAT defers hearing in RIL penalty case against SEBI

The Securities Appellate Tribunal (SAT) has put off hearing in a case pertaining to penalty imposed on Reliance Industries Limited (RIL) by the Securities and Exchange Board of India (SEBI) for alleged disclosure violations. RIL had filed an appeal to SAT against SEBI’s order. The next hearing in the case will now take place on March 19.

SEBI had imposed Rs 13-crore penalty on RIL on allegations that the company had not disclosed that it had issued 12 crore warrants to promoters in April 2007. According to the market regulator, this increased paid-up capital of RIL, but the company did not reveal diluted earnings per share (EPS).

“EPS is one of the important tools that investors use while making a decision regarding their investment in particular scrip”, SEBI had said in its order. However, an RIL spokesperson had said that it was not a matter of non-disclosure, a news report revealed.

“The issue relates to the method of calculation of diluted EPS under the accounting standards. The issue is not of non-disclosure. It can be observed from the results published by the company of all the quarters in question that both basic and diluted EPS have been disclosed. The company in its arguments and written submission has brought out all the relevant clauses of the accounting standards to substantiate why basic EPS and diluted EPS were the same in all the quarters. We are now studying the order as to the interpretation Sebi has taken and would take appropriate action based on legal advice,” as per statement issued by RIL.