Camille asks: New Delhi, It is not mere coincidence that the Bombay Stock Exchange catapulted
the Ambanis as the world’s richest having market capitalization of $
91 billion. This is certainly a moment of great pride for the nation
that was not too long back known as a land of snake charmers.
While the credit for changing the image goes to the IT sector, the
booming economy and with it the skyrocketing equity market, is doing
more than its bit to take the flying tricolour higher.
The latest bull run has seen the Sensex register 1000 point rise once
in 6 days and another as much rise in 2 days. The credit for the
spectacular rise goes largely to the ‘Reliance pack’— companies
belonging to the Mukesh and Anil Ambani group companies.ket
However, there’s more to it than meets the bull’s eye, pun intended.
While nobody can dispute a promoter’s desire to cash in on the booming
market, the way Anil Ambani has sought to ride roughshod over investor
interest may not pass muster with the capital market regulator
Securities and Exchange Board of India.
The case relates to the proposed initial public offering of his group
company and Reliance Energy Ltd.’s subsidiary, Reliance Power Ltd..
The company has already filed draft red herring prospectus with Sebi.
From the documents submitted to the regulator, one can clearly see
that Anil is trying to make personal gains at the cost of would be
investors of Reliance Power and the current shareholders of Reliance
Energy.
The DRHP says that Reliance Power is owned 50% by private companies of
Anil Ambani and the balance by Reliance Energy. Anil has contributed
10 bln rupees for his 50% stake.
The company is expected to raise 80 bln rupees via its 1.3-bln-share
IPO with the face value of each share being 2 rupees. Therefore, the
expected issue price per share is seen around 60 rupees.
At the issue price of 60 rupees, Reliance Power is worth 700 bln
rupees and Anil Ambani’s stake at 350 bln rupees, which has been
acquired for merely 10 bln rupees!
Also, according to clause 3.7.1 (i) of Sebi guidelines, a company
cannot make a public issue of 2 rupees face value share at a price
less than 500 rupees each.
Hence, in case Reliance Power issues the shares at a price of 500
rupees per share, Anil Ambani will gain upwards of 550 bln rupees at
the expense of future shareholders of Reliance Power.
What is also puzzling is why the group has ignored the 78-year-old
Reliance Energy for executing the prestigious ultra mega power
projects in the country.
Reliance Energy has been forced to transfer its huge resources in
terms of manpower and technical expertise to Reliance Power for the
UMPPs. The only argument that seems logical here is the personal gain
of Anil Ambani.
Little surprise. Sh Silvius Condapan, MP Rajya Sabha and Sh Baleshwar
Yadav, MP Lok Sabha have written to the Central Vigilance
Commissioner, the Finance Minister and to Sh. Prem Chand Gupta,
Minister for Corporate Affairs complaining against this malpractice.
