Ril Case Enters Last Lap, Switch Issue Remains

While the decision of the CLB yesterday is nothing out of the ordinary, given that several other corporates are known to have had their offences compounded by CLB earlier, the crucial issue now before Reliance is the aspect of duplicate shares and the share switch. But even in the duplicate shares case, the stand taken by RoC yesterday, that of not opposing the move if RIL applies for permission before the court for compounding of the offence relating to duplicate shares, has made RIL's job much easier.

More so, since CLB has said yesterday that the offence could be compounded, subject to court permission. RIL now has to merely try and expedite the permission from the court if it wants to get it before the next CLB hearing date of October 11.

 

The stand of the RoC is, therefore, crucial to how the duplicate shares offence is treated. However, CLB has said yesterday that even in applying for compounding of offences, the applicants have admitted that there were lapses on their part. RIL has made it clear time and again, that the lapses were not mala fide and were merely procedural, something it reiterated yesterday before CLB as well.

While the 26 cases of share transfer delays would be rendered infructuous when the court of the additional metropolitan magistrate hears the case again on October 15, the other major issue, that of replacement of shares, something which has now come to be known as the share switch, remains to be heard by CLB.

How CLB deals with the share switch case would also depend on the RoC's stand on the issue. But yesterday's CLB hearing has clearly shown that RoC does not intend to merely oppose for the sake of opposing RIL's compounding applications. Whether it would take the same stance on the share switch applications would go a long way in determining the manner in which one of the biggest controversies of the 90s finally comes to an end.

THE TURNING POINTS

* November 16: The Bombay Stock Exchange suspends trading in RIL scrip for 3 days over Rajul Vasa duplicate shares issue

* December 4: BSE rejects RIL application for delisting on leagal grounds, requests company to withdraw it

* December-end: Finance Minister Mahmohan Singh orders joint probe by Sebi-DCA inot RIL duplicate shares and shares switch cases.

1996

* January 12: Sebi submits first interim report on Rajul Vasa duplicate shares case

* February 12: Sebi issues show cause to RCS

* May 28: Finance Minister Jasawant Singh orders DCA to issue show cause in RIL share switch and duplicate shares cases

* June 10: DCA issues show-cause notices to RIL, RCS and the Ambanis

* June end or early July: RIL, its directors and RCS files applications for compounding of offences with RoC which are forwarded to Company Law Board by RoC

* July 12: RoC files 29 cases against RIL,its directors and RCS for share transfer delays, duplicate shares and switched shares.

* October 5: CLB allows compounding of offences in 26 share transfer delay cases and orders RIL to seek court permission for compounding in the case of duplicate share case.