HC verdict on RIL demerger likely on Dec 9

The Mumbai High Court today said it will reserve the verdict on the Reliance demerger petition till Friday. This follows hearing of a minority shareholder's objections to the demerger.

Kalpesh Bharatkumar Mankad, an Ahmedabad-based chartered accountant and a minority shareholder, pleaded that the demerger was a mere arrangement between the members of the Ambani family, the promoters of the company, and not division of its business. He also alleged that the company had indulged in unfair practice towards its shareholders while rolling out the demerger process.

Seeking dismissal of the intervening petition of Mankad, Reliance Industries pointed out that the petition was speculative in nature and the intervening applicant was trying to derail the demerger process.

The company argued that more than 99.9 per cent of the equity shareholders had given their consent to the demerger at an extraordinary general meeting held at the instance of the court. Reliance has 20 lakh shareholders.

Following the announcement on June 17 of a settlement between the Ambani brothers, the Reliance Industries board had given the go-ahead for the demerger scheme on August 5.

The scheme proposed that all shareholders would get one share each in the four new companies to be created as part of the demerger with effect from September 1. The scheme further proposed that Mukesh Ambani would control Reliance Industries and IPCL while Anil Ambani would take care of Reliance Energy, Reliance Capital and Reliance Infocomm.

Reliance Industries had moved the Mumbai High Court on September 13 seeking its approval of the demerger.

Mankad, in an affidavit, said while announcing the demerger of assets worth Rs 19,119.54 crore, the description that Reliance gave did not specify which assets and liabilities would be transferred to the new entities and that confused shareholders.

He requested the proposed demerger scheme be held in abeyance until the action taken report of corporate governance issues raised by Reliance's former vice-chairman and managing director Anil Ambani is put up before the HC and scrutinised by the Securities and Exchange Board of India and Department of Company Affairs.