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Sebi chairman for probe into charges against RPL

Bhupesh Bhandari

The Securities & Exchange Board of India chairman D R Mehta is writing to the finance ministry suggesting the constitution of a group consisting of representatives from the finance ministry, Reserve Bank of India, Central Board of Direct Taxes and Sebi to look into the issues raised by Bahujan Samaj Party Member of Parliament Raashid Alvi pertaining to Reliance Petroleum.

In a letter written to Alvi, Mehta has said that since he has raised several inter-connected issues involving several agencies, he has come up with such a suggestion. Mehta, however, declined to comment on the matter.

In an earlier letter written on March 2, 2001, Mehta had informed Alvi that the issues raised by him regarding Reliance Petroleum allegedly using its issue proceeds in contravention of the public issue rules were not within the regulatory jurisdiction of Sebi. "I would like to clarify that the matter of monitoring utilisation of funds is not within the purview of Sebi," Mehta had said in the letter.

Reacting to the Sebi letter, a Reliance spokesperson said "As we have said before, these allegations are part of a campaign of calumny and disinformation spread by vested interests to tarnish our image and reputation. We welcome any investigation by any agency of the government and we are confident that the truth when it comes out through such investigation will fully vindicate us."

In that letter, Mehta had mentioned that IDBI was appointed as the monitoring institution for the Rs 26.74 billion public issue made by Reliance Petroleum in November 1993. "The monitoring agency, on the basis of the auditor's certificate submitted by the company, has confirmed that the amount has been deployed in the project for which the funds were raised," the letter had said. Mehta has reiterated the point in his latest letter.

In the letter, Mehta has said that the case relates to 1993 "when many of us were not in Sebi and as such have no personal knowledge about it."

Regarding the allegation of insider trading on Reliance Industries Ltd shares, Mehta has said in the letter that Sebi tried to find out from the old records whether this issue was looked into but to no avail. "However, in light of the information provided in your letters, we will examine whether there is any evidence to indicate insider trading and price manipulation in the shares," Mehta has written in the letter adding: "However, I would like to add that in 1993, Sebi Fraudulent and Unfair Trade Practices Regulation was not in place."

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