Separately, the capital markets regulator sent another show cause notice to the company’s associate entity, Reliance Strategic Investments, on December 2 for alleged violations while trading in Nifty derivative contracts, as per the prospectus.
A show cause notice gives the recipient details of an alleged offence and asks it to explain why disciplinary action should not be taken. While the Data Infrastructure document did not give details of the alleged violation by Reliance Industries, India’s largest company by market value, in case of Reliance Strategic Investments, it said the breach of rules was “while trading in long dated Nifty Options for December 2017 expiry for the alleged box trades on trade dates viz. July 31, August 08 and August 10, 2017” on the NSE. Box trades are complex trading strategies done using combinations of options.
The prospectus said Reliance and Reliance Strategic would be responding to the show cause notices. It could not be ascertained if they have responded.
Email queries to Reliance and Sebi remained unanswered.
One of the alleged violations by Reliance Industries is that of “Principle No. 4 under Schedule A – Principles for Fair Disclosure of UPSI”, according to the document.
Principle No. 4 mandates: “Prompt dissemination of unpublished price sensitive information that gets disclosed selectively, inadvertently or otherwise to make such information generally available.”
The notice also alleges Reliance violated Regulation 30(11) of the listing rules. This says the company, at its own initiative, can “confirm or deny any reported event or information to stock exchange”.
