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HC asks RPL, Edelweiss to try resolving share sale issue

Press Trust of India  |  Mumbai 

The on Tuesday suggested and Group to resolve their dispute over sale of pledged shares amicably while posting the matter for hearing after two weeks.

A division bench of N H and Justice N M Jamdar was hearing a petition by Reliance Power's promoter company and The promoter entity has challenged a single bench's order that refused to stop sale of pledged shares by Group or grant any relief to Ltd (RPL).

The division bench suggested the parties concerned to try resolving the dispute out of court and said it would hear the petition after two weeks.

"Such matters can be resolved amicably...outside of court...consider it," said.

On February 13, a single bench presided by Justice K R Shriram said it found no merits in RPL's arguments prima facie and the entire pleadings made by RPL "smacked of deceit".

RPL argued before Justice Shriram's bench that the sale of its pledged shares byEdelweiss' was illegal and must be stopped.

It urged the court to stop such sale as an interim relief and to subsequently declare the sale illegal and void,

It also requested the court to direct to pay it a compensation of over Rs 2,700 crore for the fiscal and reputational loss caused by such sale.

As per the plea, RPL and its sister company pledged some shares to various promoter companies of the in lieu of some money it borrowed.

On February 4, RPL received a notice from Edelweiss' ECL Finance Ltd notifying the sale of its shares by the debenture holding companies of the

The next day, shares worth Rs 5.96 crore were sold. Some shares were also transferred to the debenture holders the same evening on the now lowered value.

ECL, through its Janak Dwarkadas, told the single bench on February 13 that it was well within its rights to sell the shares.

According to ECL, in August this year, RPL's share value plummeted and as per their contract, RPL was required to pay an additional two per cent interest on the amount it borrowed.

However, RPL refused to pay the additional amount.

"On February 1 this year, RCom announced bankruptcy. The share value began to drop. But RPL never bothered to communicate with us. We needed to protect our debenture holders and therefore, began the sale of shares pledged to us," Dwarkadas then argued.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, March 12 2019. 19:47 IST