Reliance Info debunks claims of discrimination in share allotment

Caught in a controversy over reported allocation of its shares to privately held companies at much lower price than those given to Reliance Industries, the Mukesh Ambani-controlled Reliance Infocomm today dismissed the reports as 'totally false and baseless'.

Asserting that there was no discrimination in the share allotment, a statement from Reliance Infocomm said "the systematic and deliberate propaganda is targeted at Reliance Infocomm and its chairman."

It said it has been alleged that Reliance Infocomm and Reliance Communications Infrastructure Ltd (RCIL) have allotted shares to Reliance Industries Ltd and corporates (Mukesh D Ambani investment companies) at different rates to the detriment of the RIL shareholders. "This allegation is baseless."

Detailing the equity pattern of RCIL, the holding company of Reliance Infocomm, it said both RIL and corporates (Mukesh D Ambani investment companies) have been issued the same number of shares at the same price at the same time.

"Hence the question of any discrimination to Reliance Industries limited or loss to its shareholders does not arise at all," the statement said.

The statement from Reliance Infocomm comes amid spate of reports that flagship Reliance Industries was given Infocomm shares for up to Rs 250 a share against a host of privately held companies, including some of Mukesh Ambani, for a price of only Re 1.

Giving details of share allotments of RCIL, the statement said RCIL is the holding company of Reliance Infocomm, whose total equity base is 200 crore shares.

Of these, 90 crore shares are allotted to Reliance Industries Ltd and 90 crore shares are allotted to Mukesh D Ambani investment companies.

The other 20 crore shares are held in a trust for business associates and employees.

Initially, RCIL issued 81 crore shares each to Reliance Industries and corporates (Mukesh D Ambani investment companies) at par (i.e., Re 1 each) but subsequently, RCIL issued 9 crore more shares each at Rs 250 to both RIL and Mukesh D Ambani investment companies.

It is clear that a total of 90 crore shares each at an aggregate price of Rs 2,331 crore averaging to Rs 25.90 per share were issued to both RIL and Mukesh D Ambani investment companies at the same terms, price and time, it said.

"While financial analysts and experts can, no doubt, see through the deliberate misrepresentations, lay persons may be confused by sensationalisation and distortion of information available in the public domain," it added.

Reliance Infocomm is the operating company pursuing major infocomm business activities whose equity base is 416.35 crore shares.

RCIL, the holding company of Reliance Infocomm, holds 321.85 crore shares by investing an amount of Rs 2,941.17 crore at an average price of Rs 9.13, the statement said.

In addition to this, Reliance Infocomm has issued 31.5 crore shares each at Re 1 per share to Reliance Industries, Mukesh D Ambani investment companies and trust for business associates and employees, the company said.

"So, it is clear that Reliance Infocomm has not issued any shares at a price of Rs 250 to any investor. Additionally, there is no discrimination in the allotment of shares between Reliance Industries and Mukesh D Ambani investment companies and associates," it added.