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Sebi discards insider trading charges against Manoj Modi

Charges could not be established against aide of Mukesh Ambani

Written by ENS Economic Bureau | Mumbai | Published: April 11, 2013 1:04:27 am

The Securities and Exchange Board of India (Sebi) has disposed of insider trading charge against Manoj Modi,a close aide of Reliance Industries chief Mukesh Ambani,in a six-year old case involving IPCL shares,saying violations “do not stand established”.

“Considering the facts and circumstances of the case and available records,the alleged violation of the PIT Regulations as specified in the show-cause notice dated January 31,2011 against Manoj H Modi and Smita M Modi do not stand established and the matter is,accordingly,disposed of,” Sebi said in an order issued on Wednesday.

From the available records it is observed that there is no evidence to substantiate/demonstrate the connection between Modi and the company as required under PIT Regulations other than that there is close proximity between Modi and Mukesh Ambani,chairman,IPCL,the order said.

“In the given facts and circumstances of the case and from the available records it may be inferred that Modi did not have professional or business relationship with RIL and he may not be reasonably expected to have access to UPSI (price sensitive information on amalgamation of IPCL with RIL) from RIL,” Sebi said.

According to the Sebi,it was alleged that during the period from February 28,2007 to March 2,2007,the Modis together bought 1,00,000 shares of IPCL for Rs 257.82 lakh prior to announcement of declaration of interim dividend and amalgamation of IPCL with RIL,i.e.,when the price sensitive information remained unpublished. It was further alleged that Modi and Smita Modi did not sell any shares of RIL and received the dividend of Rs 6 per share amounting to Rs 6 lakh.

“Pursuant to record date for merger of IPCL with RIL on October 18,2007,Modi and Smita Modi received 20,000 shares of RIL as against 1,00,000 shares of IPCL acquired prior to the dissemination of the price sensitive information,” the order said.

During the deposition of Modi recorded on July 16,2007,he had stated that “he acts as professional consultant to MARIL-NBV (new initiatives of RIL),and currently involved in Reliance Retail project and that his consultancy with Reliance group is only for new business ventures”.

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