INDIA BUSINESS WORLD - JANUARY 1st - JANUARY 15th
- 2008
SUPREME COURT PUTS RELIANCE POWER MEGA IPO BACK ON TRACK
Trouble seems to be jogging along Anil Ambani ever since he put the much-hyped Reliance Power IPO on track.
Reliance Power had obtained a stay from the Supreme Court against a writ petition filed by an investor association, which had moved the Gujarat High Court to stall the mega IPO. The apex court stayed the interim proceedings in the high court, but the Rajkot Jilla Grahak Suraksha Mandal (RJGSM) along with Jagrut Grahak Suraksha Mahila Mandal, which filed the writ petition expressed a resolve to take the matter to the apex court. RJGSM is one of the 22 Sebirecognised investors' association in the country. Gujarat has four such associations.
Other associations have, however, not joined hands with RJGSM. The high drama around the upcoming public issue, so far country's biggest, involves high-profile players. They include former Gujarat chief minister Chhabildas Mehta, former Congress MP Ramjibhai Mavani, retired Justice SK Dubey and Justice TS Doabia among others. The writ petition filed was the fourth such attempt by the group to stall the IPO. The group first approached local authorities raising concerns over the interests of Reliance Energy shareholders, pricing of the issue, timely completion of the power projects, returns to investors.
The group later communicated not only to Sebi but also to the London Stock Exchange, where Reliance Energy's GDR is listed. They also wrote letters to institutional investor LIC, which was a 11.75% holding in Reliance Energy as on September 31, 2007. The Mavani-led RJGSM pleaded to the high court to prevent Anil Ambani from launching the public issue. However, the company got a Supreme Court stay against any proceedings over its IPO in the high court.
Mr. Mavani said, "We are not against the Reliance Power IPO. However, we certainly disagree with some of the provisions and clauses, which are neither in the interests of the shareholders of Reliance Energy, nor the subscribers of Reliance Power. We will not stay quiet. RJGSM would soon knock the doors of the Supreme Court after consulting the legal experts." He added that the power projects bagged by Reliance Energy should not be transferred to Reliance Power without any consideration. He has sought the reassessment of the price at which ADAG is offering Reliance Power shares to the retail investors.
Earlier, Mr Mavani and individuals like Pradeep Nambiar, Bhupendra Singh and Ramachandran Nair had also approached the Bombay High Court. On November 1 2007, the Bombay High Court directed Sebi to hear the complainants.
Following this, Sebi's wholetime members TC Nair and VK Chopra heard the complainants on December 4, 2007. RJGSM and other complainants had sought one more hearing before the Sebi gave its final nod to the public issue. However, Sebi gave final clearance to the company in the last week of December.
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