In brief. On 29 November 2007, Reliance Industries Limited held a large short position in November futures of Reliance Petroleum Limited (RPL) through a set of associated entities, and placed concentrated sell orders during the closing minutes of that day's trade, depressing the RPL settlement price and crystallising a substantial gain on the short position. In March 2017, after a decade of proceedings, SEBI ordered Reliance Industries to disgorge approximately ₹447.27 crore with interest at 12 per cent per annum, on a finding that the conduct was a fraudulent and unfair trade practice. On 5 November 2020 the Securities Appellate Tribunal upheld SEBI's order. Reliance's appeal was admitted at the Supreme Court in December 2020 and, as at the date of this article, the matter remained pending there.
The RPL case is the longest-running single-event PFUTP matter in the modern record. The trade in question lasted about ten minutes, on one day, in November 2007. The litigation has now run for almost two decades and continues to test, at the Supreme Court, whether the conduct of a listed parent's affiliates in the derivatives segment of a listed subsidiary's stock can amount to manipulation that crystallises a gain disgorgeable under the PFUTP Regulations. The doctrinal questions are narrow; the consequences for how large promoter groups operate in the derivatives market are wide.
What did Reliance do on 29 November 2007?
Through a set of entities described in SEBI's order as having acted in concert with Reliance Industries Limited, the group built up a substantial short position in November futures of Reliance Petroleum Limited in the derivatives segment of the NSE.1 November 29, 2007 was the expiry day for those futures. During the closing window of that day's trading, large sell orders were placed in the cash market for RPL shares, which depressed the settlement price.1 The short futures position then settled at the depressed price, locking in a gain on the short. The substantive question SEBI investigated was whether the closing-window selling was independent commercial activity or was placed in order to depress the settlement price.
Why did SEBI treat this as insider trading or as market manipulation?
It was not framed as classic insider trading, which would have required unpublished price-sensitive information. SEBI framed the conduct as manipulation within the PFUTP Regulations, on the theory that the closing-window selling had been timed and sized to influence the settlement price for the benefit of the short position the same group already held in the derivatives segment.1 The substantive PFUTP architecture, and the way the Supreme Court has read fraud under it, is set out in What Does SEBI Use to Punish Market Fraud? and Can Conduct Be 'Fraud' Without a Lie?. On SEBI's framing, the act of selling in the closing window was the act, and the effect of that act on the settlement price was the manipulation.
What did SEBI's 2017 order find and direct?
In March 2017, SEBI's WTM held that Reliance Industries and the associated entities had engaged in fraudulent and unfair trade practices in relation to the closing-day trading on 29 November 2007.1 The order directed Reliance Industries to disgorge the wrongful gain made on the futures position, which SEBI quantified at approximately ₹447.27 crore, together with interest at 12 per cent per annum running from 29 November 2007.1 The order also imposed forward-looking restrictions on Reliance Industries' access to the equity derivatives segment for a fixed period. The distinction between the disgorgement of the gain and any separate penalty for the underlying default is set out in Does SEBI Fine You, or Take Back What You Made?.
How did SAT respond in November 2020?
On 5 November 2020, the Securities Appellate Tribunal upheld SEBI's order in substance, including the principal disgorgement direction.2 The Tribunal accepted, on the evidentiary record before it, that the closing-window selling was part of a coordinated pattern with the existing short futures position and that the resulting impact on the settlement price was the manipulation the PFUTP Regulations were designed to capture. The Tribunal's affirmation is the most important post-2007 fact in the case, because it means the SEBI characterisation of the conduct has now been tested and accepted at the appellate level, on the evidence as presented.
Where does the matter stand at the Supreme Court?
Reliance Industries' appeal against the Tribunal's order was admitted at the Supreme Court on 18 December 2020 and the matter has been on the Court's appeal docket since then.3 As at the date of this article, the appeal was pending; the figures cited in this chapter reflect the SEBI and SAT orders as they currently stand and may be tested or modified by the Supreme Court. The appellate route to the Court on a question of law from a Tribunal order is the route described in How Does SEBI Actually Enforce the Law?.
What does this case mean for promoter-side derivatives positions?
It draws a hard line around what a listed parent's affiliates can do in the derivatives segment of a connected listed entity's stock. The substantive lesson is that holding a short position is not, by itself, manipulation; placing concentrated cash-market orders in the closing window with the effect of moving the settlement price is, where the regulator can show coordination between the position and the closing-window activity. On SEBI's framing, accepted by the Tribunal, the combination of the position and the trades makes out the PFUTP case, even where each in isolation might have looked routine. Promoter-group risk control around derivatives positions in connected listed entities is, in the post-RPL world, calibrated accordingly.
Why is RPL important to PFUTP doctrine?
Because it is one of the largest single-event quantifications of disgorgement under the PFUTP Regulations to have survived a SAT appeal, and because, if the Supreme Court ultimately confirms it, it would settle at the highest level that closing-window manipulation in service of an existing derivatives position is the kind of conduct the regulations were built to reach. The combination of doctrinal reach (PFUTP), evidentiary method (pattern reasoning, drawn from cases like Kishore Ajmera) and large quantum makes the case a working test of how the modern PFUTP machinery, when fully geared, actually operates. For the empirical record of how PFUTP enforcement falls across the orders, see How Does India's Securities Regulator Actually Work?.
Sources & citations
- SEBI Whole-Time Member, Order in the matter of Reliance Petroleum Ltd (RPL) dated March 2017, in respect of Reliance Industries Limited and others, directing disgorgement of approximately ₹447.27 crore with interest at 12 per cent per annum running from 29 November 2007, on findings of fraudulent and unfair trade practices in the closing-window trading on the RPL November 2007 futures expiry.
- Reliance Industries Limited & Ors v. SEBI, Securities Appellate Tribunal, order dated 5 November 2020, upholding SEBI's disgorgement order.
- Supreme Court of India, admission of Reliance Industries' appeal against the Tribunal's order on 18 December 2020; the matter remained pending as at the date of this article and the figures may be subject to further modification.
- SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003, Regulations 3 and 4(2), read with Section 12A of the SEBI Act, 1992, as the substantive PFUTP framework relied upon.
About this article. Part of Legal Wires' SEBI Enforcement series, an analytical guide to India's securities enforcement record. This is general information and commentary, not legal advice; do not rely on it for any specific matter. Prepared with AI assistance and reviewed by the Legal Wires editorial team. Where SEBI findings or appellate holdings are described, they are as recorded in the underlying orders. The matter is pending appeal at the Supreme Court and the figures cited may be tested or modified. Last reviewed: 28 May 2026. Spotted an error? Tell us and we will review it.