New Delhi: A day after accusing L&T and Edelweiss entities of causing huge market value erosion by “illegal and motivated” sale of their pledged shares, Anil Ambani-led Reliance Group said boards of its three listed firms have recommended “all appropriate legal steps” to protect shareholders’ value.
In separate regulatory filings, Reliance Capital, Reliance Infrastructure and Reliance Power said their respective boards met on Saturday to review the events of last week, leading to a sharp fall in their market capitalisation and destruction of wealth.
L&T Finance and Edelweiss Group have refuted the allegations and have counter-alleged Reliance Group of failing to make timely payments, which they said necessitated sale of pledged shares.
In its filing, Reliance Capital said its over seven lakh shareholders have been impacted by what it termed as “illegal, motivated and unwarranted actions of L&T Finance”.
Reliance Power separately said its board also reviewed the events leading to a sharp fall in market capitalization and destruction of wealth due to “illegal, motivated and unwarranted actions of L&T Finance Limited and Edelweiss Group impacting its over 3.1.75 lakh shareholders”.
Its board also recommended and approved ‘all appropriate legal steps to protect and enhance the value of all its stakeholders, especially the over 31.75 lakh retail shareholders of the company’.
Reliance Infrastructure blamed L&T Finance Limited for market value erosion, saying it has impacted its over eight lakh shareholders and said its board has therefore recommended and approved all appropriate legal steps.
In its statement on Friday, Reliance Group sqid, “The illegal, motivated and wholly unjustified action by the above two groups has precipitated a fall of Rs 13,000 crore, an unprecedented nearly 55 per cent, in market capitalisation of Reliance Group over just these four short days.”
The group said the actions have caused substantial losses to 72 lakh institutional and retail shareholders, and harming the interests of all stakeholders.
|Other side of story|
|Edelweiss Group said it has reached out numerous times to Reliance ADAG Group to address concerns on shortfall in margins and resultant fall in collateral valuation.
“Despite our best efforts, not only did Reliance ADAG Group fail to address any of the concerns raised by Edelweiss Group, but also continued to breach contractual obligations,” it said in a separate statement.
On 4 February, there was a sharp drop in the prices of Reliance ADAG group shares, which led to further erosion in the collateral value, Edelweiss said, adding that it also gave due opportunity for remediation.