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HC asks Reliance group firms, Edelweiss' NBFC arm to settle out of court

The Reliance group companies had moved Bombay HC seeking damages from Edelweiss for selling its shares "illegally"

Jash Kriplani 

Anil Ambani
File photo of Anil Ambani

The (HC) on Tuesday asked Anil Ambani-led group and Edelweiss’ non-banking financial (NBFC) arm to try and find a workable solution out of court. The next court hearing would be on March 26.

Lawyers representing Wind Turbine Installators Industries and Project Ventures and Management — said the company is looking for a strategic investor who can buy promoter shares and gain control of the company. No particular company was mentioned.

Counsels representing the two sides reiterated their arguments on the sale of

Janak Dwarkadas, counsel for ECL Finance, said the group should pay the Rs 190-odd crore it owes to the company and not advice on how to sell the or at what price to sell the

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The counsel representing said that selling pledged shares in large quantity was detrimental to the value of equity held by the lender and also hurt the value of shares held by the small public shareholders.

“They are finding fault with the lender after the pledge is invoked. They are saying they were given too short a notice. They didn’t realise all this while taking the money,” Dwarkadas said.

The court was informed that the company on Monday sold more pledged shares, but the quantity was smaller than earlier.

The court was also informed that the Anil Ambani group had approached Edelweiss’ NBFC arm requesting a moratorium on selling of pledged shares till a strategic investor is brought on board. However, the latter was not prepared to wait.

According to reports, the promoter entities of the Anil Ambani group had reached an in-principle understanding with a little more than 90 per cent of its lenders in February.

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The latter had agreed not to sell pledged shares in the group till September. The group informed the lenders that it had appointed investment bankers to sell up to 30 per cent of the shareholding in Reliance Power to institutional investors, to repay the banks.

The companies had moved Bombay HC seeking damages from for selling its shares “illegally”.

On February 8, 2019, the group said L&T Finance and certain entities of Group invoked pledge of listed shares of Reliance Groupand made open-market sales of the value of approximately Rs 400 crore in early February, as reported.

The group had said the “illegal, motivated, and wholly unjustified action” by the above two groups had precipitated a fall of Rs 13,000 crore, an unprecedented 55 per cent, in market capitalisation of the over four days, causing substantial losses to its shareholders.

The petition filed in the HC was only against Edelweiss. The court had earlier declined to give any interim relief to the Reliance group companies.

First Published: Tue, March 12 2019. 20:21 IST