Reliance Industries Limited faces ethical dilemmas regarding insider trading. The Securities and Exchange Board of India fined Reliance Petro-investments Rs 11 crore for violating insider trading norms by trading in IPCL shares before its merger with RIL was announced, using unpublished price sensitive information. Reliance Industries is committed to high ethical standards through its code of conduct focusing on honesty, integrity, fairness, respect, responsibility and care. However, the company still faces challenges in fully upholding its values and complying with all laws and regulations regarding issues like insider trading.

1. Code of coduct and Ethical dilemma
Faced by Reliance
Submitted by
Samir shah

2. Code of conduct & Ethical dilemma faced
By reliance industries limited
Business Ethics
ETHICS = TRUTHFULNESS + TRANSPARENCY + RIGHTEOUSNESS + MORALITY
Business ethics which is also known as corporate ethics is a form of applied
ethics or professional ethics that examines ethical principles and moral or ethical problems that
arises in a business environment. It applies to all aspects of business conduct and it is relevant to
the conduct of individuals and entire organizations.
The study of proper business policies and practices regarding potentially controversial issues,
such as corporate governance, insider trading, bribery, discrimination, corporate social
responsibility and fiduciary responsibilities .
According to investopedia, Business ethics are implemented in order to ensure that a certain
required level of trust exists between consumers and various forms of market participants with
businesses.
Reliance industries Limited
Reliance Industries Limited (RIL) is an Indian conglomerate holding company which is
in Mumbai, Maharashtra, India. The company operates in five major segments: exploration and
production, refining and marketing, petrochemicals, retail and telecommunications. RIL is the
second-largest publicly traded company in India by market capitalisation and is the second
largest company in India by revenue after Indian Oil Corporation.
The company was co-founded by Rakesh Ranjan and his cousin Champaklal Damani in 1960s as
Reliance Commercial Corporation. In 1965, the partnership was ended and Dhirubhai continued
the polyester business of the firm .In 1966, Reliance Textiles Industries Pvt Ltd was incorporated
in Maharashtra. In 1985, the name of the company was changed from Reliance Textiles
Industries Ltd. to Reliance Industries Ltd. During the years 1985 to 1992, the company expanded
its installed capacity for producing polyster yarn by over 145,000 tonnes per annum.
The Hazira petrochemical plant was commissioned in 1991-92. In 1993, Reliance turned to the
overseas capital markets for funds through a global depositary issue of Reliance Petroleum. In
1996, it became the first private sector company in India to be rated by international credit rating
agencies. In 2001, Reliance Industries Ltd. and Reliance Petroleum Ltd. became India's two
largest companies in terms of all major financial parameters.
( www.ethics.org.au/ethics-articles/ethical-dilemma-accountants)
Code of conduct - A set of conventional principles and expectations that are considered binding
on any person who is a member of a particular group.
RIL Code of Conduct & ethics
Reliance believes that business conduct can be ethical only when it rests on the nine core values
of Honest, Integrity, Fairness, Respect, Purposefulness, Trust, Responsibility, Citizenship and

3. Care. Reliance also believes strongly in pursuit of goals which are in national interest. The
guiding philosophy being “What is good for India id good for Reliance”.
In pursuit of these values Reliance is committed to :
• The ethical treatment of all its stakeholders – employees, customers, environment,
shareholders, lenders and other investors, suppliers and the Government; &
• conducting business in accordance with the highest standards of ethics, complying with all
applicable laws, rules and regulations.
Ethics and values
Ethical behaviour at Reliance is about living and displaying values that form the core of
Reliance’s business ethics.
A description of how these values are to demonstrated is mention below.
Honesty, integrity and fairness
Reliance insists on honesty, integrity and fairness in all aspects of its business and expects the
same in its relationship with every business associate. The company and its employee shall
always honour all commitments.Employees at Reliance are committed to be truthful and
trustworthy in all their action.
Respect
Reliance is committed to treat everyone with respect and dignity. It appreciates and values the
skills, strength and perspectives of its diverse workforce and business associates , reliance
believes that each employee makes a meaningful contribution in the company’s success.
Purposefulness
Reliance sees all its activites in terms of higher purpose and ideals. This purposefulness is a way
of operating which ties the company to its environment and the community in a mutual
beneficial relationship. Reliance always encourages teamwork with open, candid and speedy
communication.
Responsibility
Reliance’s employees ahall be committed to demonstrate highest levels of personal responsibility
and continually affirm their responsibility to Reliance in pursuit of excellence. The employees
should be committed and enthusiastic to assume responsibility for actions of the organization.
Citizenship
Reliance is committed to participating and achieving in every conceivable way the progress and
integrity of India.
Reliance is also committed to obey all the laws of India and the countries in which it does
business, and to do its part for the betterment of the communities in which it operates ,better.
Care
Compassion, sharing and kindness are values that Reliance tries to inculcate in its decision
making process to achieve fairness.
It is imperative that each one of it’s employees gets intensely driven from the heart towards
upholding these values in their day to day conduct.

4. Possible area of violence
Health care & social factor
Health care and social service, workers face an increased risk of work-related assaults stemming
from several factors. These include: The prevalence of handguns and other weapons among
patients, their families or friends; The increasing use of hospitals by police and the criminal
justice system for criminal holds and the care of acutely disturbed,violent individuals; The
increasing number of acute and chronic mentally ill patients
being released from hospitals without follow-up care (these patients have the right to refuse
medicine and can no longer be hospitalized involuntarily unless they pose an immediate threat to
themselves or others); The availability of drugs or money at hospitals, clinics andpharmacies,
making them likely robbery targets;
Commitments
Every Reliance employee shall share the company’s firm belief that the other person’s interests
count as much as his/her own.
Reliance recognizes that maintaining the trust and confidence of its stakeholders is crucial to its
continued growth and success.
Commitments to stakeholders
In each of its activities, Reliance shall demonstrate a steadfast commitment to the interests of all
its stakeholders:
Employees
Reliance recognizes that its success depends on the total commitment and support of all
employees.
Reliance is committed to respect the human rights of its employees and strives to treat its
employees with honesty, just management, due dignity and fairness. Reliance is committed to
providing its employees with a good, safe and healthy environment and competitive terms and
conditions of service.
Customers
Reliance is committed to produce is reliable, world-class quality products and services, delivered
on time, at a fair price.
Environment
Reliance is committed to acting as a concerned and responsible community participant reflecting
alla aspects of good corporate citizenship. It is committed to achieving global standards of
health, safety & environment.
Shareholders
Reliance is committed to purse sound growth and earnings objectives and to exercise prudence in
the use of its assets and resources. The company will ensure its success by satisfying its
customers and increasing shareholder value.
The Government
Reliance is a fiercely patriotic company and is enthused and proud to be a home-grown
enterprise. It is committed to the payment of all applicable taxes & duties and adherence to all
applicable laws and regulations.
(ref- corporate governance report)
(www.ril.com)
(www.ffsil.com)

5. Ethical dilemma
An ethical dilemma is a situation where one is in conflict between moral imperatives. Often
rejecting either solution has major consequences. It is also known as ethical paradox.
Ethical dilemma is also known as moral dilemma. An ethical dilemma is typically described as a
complex situation that involves a conflict between different morals. Ethical dilemmas are
commonly found in medicine.
(source- www.ethics.org.au)
Dilemma faced by the company
Insider trading:
The Securities and Exchange Board of India (Sebi) has fined Reliance Industries group entity
Reliance Petro-investments (RPIL) Rs 11 crore for violating the insider trading norms in the
shares of erstwhile IPCL before its merger with RIL.
"It may be concluded that by virtue of RPIL having control over IPCL, it was reasonably
expected to have access to unpublished price sensitive information of IPCL. RPIL being the
promoter having control over the company holding 46 per cent shares of IPCL is inherently
expected to have access to price sensitive information. The company being in such a position it is
unacceptable that it was not aware of such major/ important decisions of the company IPCL," the
Sebi order said.
Share price of IPCL on March 5, 2007, declined by 8.13 per cent on the BSE when the Sensex
declined by 3.79 per cent. However, in a divergence from the index, the scrip witnessed
substantial price gain on March 8, 2007, and March 9, 2007, subsequent to the announcement of
amalgamation of IPCL with Reliance Industries.
The findings of the investigation led to the allegation that RPIL was in the possession of
unpublished price sensitive information while trading in the scrip of IPCL prior to announcement
of declaration of interim dividend and amalgamation of IPCL with Reliance Industries which
resulted in violation of regulation 3 of SEBI (Prohibition of Insider Trading) Regulations, 1992.
(www.thehindubusinessline.com)
(www.indianexpress.com)
Decision taken by reliance
The Securities Appellate Tribunal (SAT) has adjourned hearing to October 11 on RIL's appeal
against the Securities and Exchange Board of India (Sebi) in the long-running insider trading
case.
The SAT also declined to allow an intervention petition by an individual who had alleged that
there could be collusion between Sebi and the Mukesh Ambani-led Reliance Industries to settle
the case.

6. Rejecting the plea, the SAT asked him to approach the Bombay High Court or the Supreme
Court, saying the tribunal is not the appropriate forum to hear such a plea.
(www.thehindubusinessline.com)
CONCLUSION
As per the above discussion on the code of conduct and ethical dilemma of Reliance industrial
limited . we can say that ethics is a field of interaction between business and ethics. Company are
always follow a code of conduct. Reliance is an Indian conglomerate holding company. Ethics
and values of reliance is Honesty, integrity and fairness, respect, purposefulness, responsibility,
citizenship and care.the company have some commitements towards the employee ,shareholder,
commitment to stakeholder, customer and environment.
References
(1 ) Investopedia , (online) (cited-2010), business ethics defination, Available from <URL :
http://www.investopedia.com/terms/b/business-ethics.asp>
(2) Reliance communication, (online) (cited-2009), Reliance history, Available from <URL :
>
(3) corporate governance report, Investor relations, (online) (cited-2012-2103). Available from
<www.ril.com/downloads/pdf/code
>.
(4) corporate news, (online) (cited-2012), code of conduct,(2012), Available from < URL :
www.ffsil.com/Corporate%20News/.../Code%20of%20Conduct.>
(5) Reliance industries limited, (online) (cited-2010), reliance code of conduct, Available from <
URL : http://www.ril.com/downloads/pdf/code_bce_directors.pdf.>
(6) The Hindu business, (online) (cited-2013),Insider trading case on reliance. Available from <
URL: http://www.thehindubusinessline.com/companies/ril-insider-trading-case-adjourned-tosept-25-on-new-lawsuit/article5075709.ece>
(7) ST JAMES ETHICS CENTRE, (online) (cited-2010), AN Ethical dilemma for accountant .
Available from <URL : http://www.ethics.org.au/ethics-articles/ethical-dilemma-accountants>.
(8) THE INDIAN EXPRESS, (online) (cited-2013) Insider trading case: Sebi slaps Rs 11 crore
fine on RIL firm. Available from
< URL : http://www.indianexpress.com/news/insider-trading-case-sebi-slaps-rs-11-crore-fineon-ril-firm/1110962/>.