RIL's 2007 RPL futures trade beat a ₹447-crore fraud finding — 19 years later

In March 2007 Reliance Industries announced the sale of about 5% of its stake in listed subsidiary Reliance Petroleum. In early November it had 12 entities take net short positions of 9.92 crore November RPL futures at an average ₹265.67 a share. Through the month RIL sold 20.29 crore RPL shares in the cash market, realising about ₹4,500 crore. On expiry day it sold 2.25 crore shares in the final ten minutes — 12 of 17 orders below the last traded price — pinning the settlement price at ₹215.25 and adding ₹513 crore of futures profit.

SEBI's Whole Time Member called this a "well-planned fraudulent scheme": a principal-agent structure to dodge client-level position limits, plus cash-market selling engineered to depress the futures settlement price. The March 24, 2017 order directed RIL to disgorge ₹447.27 crore with 12% interest, while separately penalising the position-limit disclosure violation. RIL appealed.

On November 5, 2020 the Securities Appellate Tribunal dismissed the appeal 2:1, holding that RIL had made an illegal gain by manipulating prices to profit in the futures segment. The Supreme Court admitted RIL's further appeal on December 17, 2020, conditional on depositing ₹250 crore in the Investors' Protection Fund.

On May 29, 2026, in a 136-page verdict, Justices J.B. Pardiwala and R. Mahadevan held the SAT had committed an "egregious error" in affirming the fraud finding: concentrating open interest is not per se manipulation when justified by hedging, and a promoter holding about 70% of RPL would not crash its own share price. The fraud finding, disgorgement and interest died; the ₹250 crore was ordered refunded. The position-limit line stood, on the rule that what cannot be done directly cannot be done indirectly: routing one client's trades through 12 undisclosed agents breached SEBI's 2001 circular.

₹447.27 crore disgorgement plus 12% interest — voided in 2026; ₹250 crore locked in an investor fund for five-plus years during appeal

The position was split across 12 agent accounts so no single client crossed derivative position limits — the exact pattern the regulator read as concealment.

RIL needed to exit a ₹4,500-crore stake without wrecking the price, and a short futures hedge was defensible treasury practice — the defence that ultimately carried the day.

The expiry-day sale below the last traded price set the settlement price and mattered only because futures were open — a fact pattern that looked engineered even if it had a commercial logic.

SEBI's case ran on inference for 19 years; the Supreme Court required direct proof of inducement or injury to third parties, and the inference collapsed.

When a hedge needs a dozen agents and a last-minute sale, expect the fraud file to open. Motive is not proof: without inducement there is no fraud — but position-limit splitting still bites.

The fraud finding, the ₹447.27 crore disgorgement and the 12% interest are void, and RIL gets its ₹250 crore back from the Investors' Protection Fund. The position-limit disclosure penalty stands, resting on the rule that a client cannot launder one position through a crowd of agents. Leaning on precedents such as SEBI v. Kanhaiyalal, the judgment raises the evidentiary bar for manipulation cases: suspicion must now be nailed to an identifiable victim. Nineteen years on, the largest disgorgement SEBI had won against a corporate house is gone.