SAT has dismissed Reliance Industries' appeal against the Sebi order rejecting RIL's consent application in the case involving trading in shares of group company Reliance Petroleum in 2007.
Retrospective amendment or retrospective effect can only be given if it is clarificatory in nature and not if it creates a problem.
HP Ranina
Corporate Tax Lawyer
Reacting to the news, corporate lawyer HP Ranina said that Reliance can go to the High Court now and challenge the SAT ruling.
"At the moment it means that Reliance has lost the appeal and we have to see what reasons have been given by SAT. Once that is clear then we would be able to come to some conclusion as to what is the basis foundation for dismissing this appeal," he said.
Below is the transcript of HP Ranina's interview with CNBC-TV18's Reema Tendulkar, Nigel D'Souza and Sajeet Manghat.
Reema: How would you read this judgement and what is the implication or the way ahead for Reliance Industries now?
A: I have not got the details of the judgement in the sense that what reasons the Securities Appellate Tribunal (SAT) has given to dismiss the Reliance appeal.
Obviously it sets a certain precedent that hereafter this type of situation will cannot be appealed against. Therefore SAT has set a precedent. In future it will certainly have an effect.
Reliance may go to the High Court now and challenge the SAT ruling before the High Court. So, we have to now wait and watch what decision the High Court takes. At the moment it means that Reliance has lost the appeal and we have to see what reasons have been given by SAT. Once that is clear then we would be able to come to some conclusion as to what is the basis foundation for dismissing this appeal.
Sajeet: What the judge has actually said is that since the new consent guidelines which were notified on January 2014 have come into affect on a retrospective basis, that is from April 2007. The application of Reliance seeking Sebi to look at the consent application was rejected on those grounds. Do you think Reliance would be having a case to go to Supreme Court and challenge the entire retrospective effect of that Sebi notification as far as consent application is concerned?
A: Retrospective effect obviously can only be done normally if it is clarificatory in nature. Therefore whether their lawyers advice them to go to the Supreme Court is a different issue altogether. I think Reliance will certainly try to do that. Certainly they will take a chance with the Supreme Court, I feel.
Retrospective amendment or retrospective effect can only be given if it is clarificatory in nature and not if it creates a problem.
So, this is an issue which will have to be considered.
(Disclosure: Reliance Industries has made an open offer for the takeover of Network18, which owns Moneycontrol.com and other digital, print and TV channels).
Reliance stock price
On June 30, 2014, Reliance Industries closed at Rs 1014.70, up Rs 1.65, or 0.16 percent. The 52-week high of the share was Rs 1142.50 and the 52-week low was Rs 765.00.
The company's trailing 12-month (TTM) EPS was at Rs 68.00 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 14.92. The latest book value of the company is Rs 609.63 per share. At current value, the price-to-book value of the company is 1.66.
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