The Securities Appellate Tribunal (SAT) has set aside an April 2021 Securities and Exchange Board of India (Sebi) order that imposed a Rs 25-crore penalty on Mukesh Ambani, Anil Ambani and nine other entities for alleged non-compliance of takeover norms.

The appellants that included Reliance Industries Holding Pvt Ltd, Kokilaben Ambani, Nita Ambani, Tina Ambani and others had challenged the market regulator’s order at the appellate tribunal.

In its order, Sebi had said that RIL’s promoters and Persons Acting in Concert (PAC) failed to disclose the acquisition of more than 5 per cent stake in the company back in 2000. The RIL promoters along with PACs had then acquired a 6.83 per cent stake consequent to exercise of option on warrants attached with non-convertible secured redeemable debentures.

According to the regulator, the stake purchase was in excess of the ceiling of 5 per cent prescribed under the takeover regulations. It pointed out that an obligation to make a public announcement about acquiring the shares arose on January 7, 2000 which was the date on which the PACs were allotted RIL shares following the exercise of warrants. However, Sebi had found out that the promoters and PACs did not make any public announcement for acquiring the shares.

“We find that the appellant has not violated ... the SAST (Substantial Acquisition of Shares and Takeovers) Regulations. The imposition of penalty upon the appellant is without any authority of law. Consequently, the impugned order cannot be sustained and is quashed,” the appellate tribunal said in its 124-page order.

“Since we have set aside the impugned order, the respondent is directed to refund the amount of Rs 25 crore within four weeks from today,’’ the tribunal added.