Mukesh Ambani and his company Reliance Industries Ltd. have been slapped with a combined $5.5 million fine by the Securities and Exchange Board of India.

The fine is over accusations the company violated the country's share-trading rules - more than 12 years ago.

The regulator said Reliance and its agents earned undue profits from the sale of shares of one of the company's subsidiaries, Reliance Petroleum. Board officials said that Reliance and its founder are both liable for manipulative trading.  

"The said scheme of manipulation was deceptive and against the interest of the securities markets," the board said in its order.

Reliance will need to pay a fine of 250 million rupees, while Ambani will need to pay 150 million rupees. The board also fined two other companies. Navi Mumbai SEZ Pvt. was ordered to pay 200 million rupees while Mumbai SEZ Ltd. was directed to pay 100 million rupees.

The regulator said that it had uncovered unlawful transactions conducted by the company and 12 unlisted trading houses using Reliance Petroleum shares. The participants originally bought stock in the company in 2007. They then took short positions before offloading stocks to push down the share's prices -  earning them significant profits from their positions.

The regulator ordered the trading companies to return more than 4.47 billion rupees they had gained plus interest. Regulators also banned Reliance from trading in options and futures in the country's equity markets for 12 months. Reliance appealed the order and said that it had made "genuine transactions" only that were in the interest of its shareholders.

Ambani merged Reliance Petroleum and Reliance Industries in 2009. The company owned and operated a refinery in the western India state of Gujarat capable of producing 580,000 barrels per day.

Analysts said that the latest order against Ambani and his company was the regulator's way of showing its teeth and deterring similar schemes. It is also part of the country's efforts to crack down on market violations perpetrated by large corporations.