Govt looking at Reliance Info share allotments: FM

The government is looking into the issue of Reliance Infocomm shares to ascertain whether any law has been violated in the allocation of one crore shares to three firms apparently at the rate of one rupee each, finance minister P Chidambaram said in the Rajya Sabha today.

"We are looking to see if any law has been violated in the allocation of shares. The enquiry is not over. We will continue to look into it," he said repsonding to supplementaries.

"From the available balance sheets of the three companies, as on 31 March, 2004, the price at which the three companies acquired shares in the erstwhile Reliance Infocomm appears to be Re one per share," the minister said during question hour.

Chidambaram said so far as complaints against Reliance pertaining to security transactions were concerned, Sebi was looking into the matter.

He said if any corruption came to light, then some other authority could do the investigation. "Right now it is Sebi (which is going into it)."

Chidambaram said according to information furnished by the ministry of company affairs, three unlisted companies held shares in an unlisted public limited company Reliance Infocomm.Unlisted companies did not fall under the purview of Sebi as they are not governed by Sebi, he said, and added the board of governors of the company was free to allocate shares to anybody. But, if it has violated any guidelines prescribed by Trai, it was for the communication ministry to ascertain.

In his written reply, Chidambaram said the shares were acquired on 12.9.2002 from K R Raja, C S Moghe and V K Gandhi by three companies - Prerana Auto (33,00,000 shares), Softnet Traders (33,00,000 shares) and Fairever Traders (34,00,000 shares).

"By an order of the Gujarat High Court on 16.12.2002, Reliance Infocomm was amalgamated with Information and communications, another unlisted company. Upon amalgamation, the name of the amalgamated company was changed to Reliance Infocomm," the minister said.

Earlier, members alleged that Reliance Infocomm sold its share at one rupee each to three insignificant companies when the market rate was Rs 250 each.

They alleged favouritism in the deal and demanded a high power enquiry into the matter to bring the culprits to book.