RIL working to stall Reliance Power IPO: ADAG

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

ADA Group firm Reliance Energy also named over a dozen executives and associates including V Balasubramaniam, Manoj Modi, A Shankar and Deepayan Mazumdar in a complaint filed before market regulator SEBI and sought a probe. However, RIL has exuded confidence that facts will come out in the investigation.

"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 alleged in a letter to SEBI last week.

When contacted, Paresh Chaudhry, president (Corporate Communications), RIL Group told PTI: "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.

Immediately after filing the complaint, ADA Group had said a formal complaint has been filed with SEBI to investigate the disinformation campaign launched against Reliance Power IPO and "the suspects have been named".

Citing various rules of SEBI, Reliance Energy, which has 50 per cent stake in Reliance Power, complaint said that the vicious campaign pulled down its stock prices by over 35 per cent in four days ending October 19, which was 'disproportionate to the overall decline in the market'.

"Reliance Energy is a constituent in both Sensex and Nifty and price manipulation of this magnitude has adversely impacted and resulted into manipulations of the main stock indices as well," it said.

Officials of SEBI could not be contacted for comments.

REL sources debunked allegations that power projects were transfered to Reliance Power without proper approvals, thus depriving shareholders of Reliance Energy of benefits.

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

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

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