New Delhi, An association of investors in Anil Ambani-led
Reliance Energy today alleged that the planned IPO of Group Company
Reliance Power will erode the value for REL shareholders, but ADAG termed
it as a "vicious campaign" by vested industrial interests.
"A close study of draft prospectus reveals that the power generation
business opportunities secured in the name of REL and secured with the
strength of REL have been transformed to RPL by means of some internal
MoUs and understandings," REL Investors Forum said in a faxed press
release.
"The shareholders of REL have been deprived of the entire power generation
business prospects to be accrued to them. By means of such a transfer of
business and creation of another shell company to issue public shares, now
the power generation profits will accrue to the new company in which Anil
Ambani holds 50 per cent." Investors in REL are feeling cheated with ADA
group company RPL"s proposed public issue, it noted.
When contacted, REL Investors Forum Secretary "Veekay", whose name was
mentioned on the release along with two other persons -- Prakash Krishnan
and Anil Upadhyaya - said that the forum members include 60-70
shareholders of REL.
"We are looking at taking legal recourse to safeguard the interest of REL
shareholders," Veekay said, adding the forum was also writing to other
shareholders to join the campaign.
However, a Reliance ADA Group spokesperson said in a statement, "Vicious
campaign of disinformation (is) underway by vicious industrial interests
to stall Reliance Power IPO."
The spokesperson said attempts were underway to engineer motivated
litigation and the "campaign was motivated by frustration at continuing
success and rising valuation of ADA group". Reliance Power"s IPO was
awaiting SEBI approval in normal course, the official added.
When asked to comment on ADAG"s view that the campaign was being promoted
by some vested industrial interests, the forum secretary denied any links
to any rival of the group.
"We have not been approached by any group... It"s just an initiative of
REL shareholders," he said, when asked whether they have been contacted by
rivals.
The Reliance ADA group spokesperson said that forged letters by Members of
Parliament based on false and baseless allegations were also also part of
the vicious campaign.
The forum said in its press release that the new company being created had
no resources for executing projects and was dependent on REL for
technical, manpower and commissioning support as well as for guarantees
for raising finances.
"The Anil Ambani group is planning to charge a huge premium from the
public for the Reliance Power shares, but ADAG"s investment companies and
REL have been alloted 210 crore shares at face value of Rs 2 per share and
only 16 crore shares will be alloted to the promoters at the same price as
the public," it added.
Reliance Power proposes to come out with an IPO of 160 crore shares to
part fund 12 power projects envisaging an investment of nearly Rs 100,000
crore. The IPO is being pegged as the biggest ever in India with a total
estimated proceed of about Rs 12,000 crore.