Reliance Industries Ltd vs Securities and Exchange Board of India on 16 December 2015

1. Appellant is aggrieved by the adjudication order passed by the Adjudicating Officer of Securities and Exchange Board of India (“SEBI” for short) on 08.08.2014. By that order penalty of ` 1 crore is imposed on the appellant for allegedly violating Section 23A(a) of the Securities Contracts (Regulation) Act, 1956 and penalty of ` 12 crore is imposed on the appellant for allegedly violating Section 23E of the Securities Contracts (Regulation) Act, 1956.

2. One of the major ground taken in the appeal is that in paragraph 29 of the impugned order, the Adjudicating Officer has taken into account

2 all the 12 crore shares relatable to the warrants in question while computing the Diluted Earnings Per Share (DEPS) for the 6 quarters in question. This factual position is not disputed by SEBI. In view of the language of AS-20, taking into account all the 12 crore shares relatable to the warrants in question while computing the DEPS does not appear to be correct.

3. Since computation of DEPS itself is not in consonance with AS-20, we set aside the impugned order and remand the matter of a de novo consideration, leaving all contentions of the parties open. It would be open to SEBI to issue supplementary show cause notice, if any, within a period of 8 weeks from today as requested by counsel for SEBI.

4. Appeal is disposed of in the above terms with no order as to costs.

Sd/- Justice J.P. Devadhar Presiding Officer

Sd/-

Jog Singh

Member 16.12.2015 Prepared & Compared By: PK