Mumbai, Feb 9 (IANS) Anil Ambani-led Reliance Group companies on Saturday said they will take all appropriate legal steps against L&T Finance to protect and enhance the value of their respective stakeholders.
The group companies which have decided to take independent legal recourse include Reliance Infrastructure, Reliance Capital and Reliance Power.
The development comes a day after Reliance Group said a few NBFCs, substantially L&T Finance and certain entities of Edelweiss Group, have invoked pledge of listed shares of Reliance Group and made open market sales of the value of approximately Rs 400 crore from 4.2.2019 to 7.2.2019.
The market capitalisation of the three companies were badly impacted due to the open market sales. The three companies together have around 46.75 lakh shareholders.
On Friday, Reliance Group said: "The purported exercise of rights to enforce the security is illegal and excessive, and against the process and requirements of the respective borrowings' documentation.
"The illegal, motivated and wholly unjustified action by the above two groups has precipitated a fall of Rs 13,000 crore, an unprecedented nearly 55 per cent, in market capitalisation of Reliance Group over just these four days, causing substantial losses to 72 lakh institutional and retail shareholders, and harming the interests of all stakeholders," the statement said.
According to Reliance Group, the manner of conduct of the above open market sales, without any orderly market disposal through a bid or structured process for shares comprising the holding of the promoter group, is also illegal on several counts like price manipulation, insider trading, front running and market abuse.
The Reliance Group claimed the sale by L&T Finance and others is in violation of various regulatory provisions, including the SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, which are applicable to all persons (including NBFCs) dealing in listed securities, whether on invocation of pledge or otherwise.
The statement said group company Reliance Communications (RCOM) has announced plans for debt resolution through the National Company Law Tribunal (NCLT) and there was no adverse impact of this unrelated RCOM proposal on Reliance Capital Ltd., Reliance Infrastructure Ltd. and Reliance Power Ltd.
As per the statement, Reliance Capital Ltd., Reliance Infrastructure Ltd. and Reliance Power Ltd. (and their various subsidiaries) are performing satisfactorily on all operating parameters, and there is no change whatsoever on any aspect as compared to the position prevailing prior to these sales.
On its part L&T Finance on Friday refuted and denied allegations it had granted loans against pledge of shares to Reliance Group companies.
"As per loan and pledge agreements, borrower did not cure various events of defaults including providing margin for shortfall in the stipulated security cover. Despite various notices in the past few months, events of defaults continued," L&T Finance said in a statement.
--IANS
rv/am/prs
(This story was auto-published from a syndicated feed. No part of the story has been edited by The Quint.)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)
0