ADAG alleges RIL execs in dirty tricks over IPO

The Anil Ambani Group (ADAG) has charged Mukesh Ambani-led Reliance Industries (RIL) with working against it and indulging in a campaign to stall the public offer of Reliance Power. However, RIL has countered the allegations saying this was an attempt to "cover up governance issues".

Anil Ambani Group company Reliance Energy (REL) has in a complaint to market regulator Sebi also named over a dozen executives and associates, including V Balasubramaniam, Manoj Modi, A Shankar and Deepayan Mazumdar and sought a probe.

"It is our definite information that the entire campaign of disinformation, forgeries and malicious rumours has been orchestrated at the behest of Reliance Industries. After the business reorganisation of Reliance group in 2005, the RIL group has been frustrated at the success of Reliance Anil Dhirubhai Ambani Group. The present campaign is part of the same effort and is being led by several of their key executives and associates," REL has alleged in a letter to Sebi last week.

The Reliance Power IPO is expected to raise close to Rs 12,000 crore and is being pegged as the biggest ever public issue on the Indian bourses.

When contacted, RIL group president of corporate communications Paresh Chaudhry said: "We are more amused than shocked over the frivolous allegations. It is an obvious malicious attempt to cover up significant governance issues."

Chaudhary said, "nobody at RIL is either involved or interested in any of the issues raised. I am sure that the concerned regulatory authority would investigate and the facts would be reported accurately."

ADAG said last week that it had filed a formal complaint with Sebi demanding an investigation over a disinformation campaign on the Reliance Power IPO and that it had named the suspects.

The company said that the campaign had pulled down REL's stock price down more than 35 per cent in four days to October 19 which was disproportionate to the overall decline in the market.

Officials at Sebi were not available for comment.

REL executives dismissed allegations that power projects were transfered to Reliance Power without proper approvals, and that shareholders were denied benefits.

They said that the decision to limit REL's stake in RPL to 50 per cent was taken by REL's independent directors way back in 2005, on an overall assessment of the funds requirement and the desired risk profile for the parent company.

"This was also fully disclosed to stock exchanges and investors. The true facts are instead mischievously being distorted by vested interests to mislead investors," the executives said.