Madras HC adjourns plea seeking CBI case against Anil Ambani

Petition was filed by Kesavan alleging that while prices of RNRL shares were Rs 63.95 and R-Power was Rs 175.30 at BSE on July 2, 2010

The Madurai Bench of Madras High Court has adjourned hearing of a petition seeking direction to the Central Bureau of Investigation (CBI) to register a First Investigation Report (FIR) on a complaint against Anil Ambani, Chairman of Anil Dhirubhai Ambani Group and others related to an alleged "large scale financial scam".

The petitioner, A Kesavan, an investor in Reliance Natural Resource Ltd (RNRL) and an advocate, in his complaint to the CBI and Serious Fraud Investigation Office (SFIO), in December, 2010, has alleged that Ambani and some officials has made undue benefit while merging RNRL and Reliance Power Ltd, in the year 2010. He also alleged that this is a "large scale financial scam to the tune of Rs 2,105.87 crore by way of fraudulent transactions in the share market."

The Court has adjourned the petition after the counsel appeared for CBI sought time to file counter, said Kesavan. He added that Justice A Selvam refused to allow an advocate who presented himself to undertake to represent Ambani and has issued a notice to Ambani.

The company officials were not immediately available for a comment.

The petition was filed by Kesavan alleging that while the prices of RNRL shares were Rs 63.95 and R-Power was Rs 175.30 at BSE on July 2, 2010, the merger was made public on July 4, 2010, and the rate of shares plummeted to Rs 45.50 per share immediately. This has resulted in a loss of Rs 18,000 for the investor personally, he added. He further alleged that while the comparison between both the share prices were 2.7:1, which means the value of one share of R-Power is equal to 2.7 shares of RNRL.

By announcing the merger with a swap ratio at 4:1, "instead of giving one R-power share against 2.7 RNRL shares, the 2nd respondent (Anil Ambani) simply undermined the value of RNRL shares by offering one R-Power share to four RNRL shares," said Kesavan in his petition.

"It is pertinent to note that the 2nd respodent was having about 84.78% of shraes in R-Power and was having 54.84% of shares in RNRL. Therefore by selling few shares of R-Power he was able to become the major share holder of RNRL by way fo undermining the value of RNRL shares," he added. In the exercise, persons like him who have invested at the rate of Rs 63.95 per share lost 20% of the value of the share on the very same day they purchased, added the petition.

He has approached the Court since there was no action taken on his complaint to the CBI, he added.

The Madurai bench has earlier in 2010, dismissed a writ petition filed by Kesavan challenging the equity swap ratio for the merger.