Intra day, Reliance Industries came down over 2.3% at Rs.1256.10 and it continues to trade in the red.

A strong ruling from SEBI led to this steep fall. For a case slapped on the company in 2007, the ruling can come now, almost 10 years later. But as they say,better late than never!

In 2007, RIL had sold 4.1% stake in erstwhile company, Reliance Petroleum Ltd (RPL) but to ensure that the price of RPL does not tank too much, the company has first sold the shares in the futures market and later in the spot market.

SEBI has thus punished the company for this ‘unlawful transaction.’ It has imposed a one-year ban and asked RIL to pay Rs.447  crore along with an annual interest of 12% dating back to 29 November 2007, which translates into a penalty of around Rs1,300 crore.

Actually, such money is loose change for a company like Reliance. There will obviously be no material impact on RIL but any legal tussle with authorities creates a sense of unease and what we can see ahead is a long drawn legal battle.