In a setback for
Anil Ambai-led Reliance, Bombay High Court on Wednesday rejected its petition seeking relief against pledged share sale by Edelweiss Financial Services Group.
Anil Dhirubhai Ambani Group (ADAG) had moved Bombay HC seeking a stay on sale of pledged shares of its three listed firms -- Reliance Power, Reliance Infra and Reliance Capital -- by Edelweiss.
On Tuesday, Reliance Power Ltd, a part of ADAG, had asked the Securities and Exchange Board of India (Sebi) to immediately ban Edelweiss Group from all capital markets and order an investigation into the sale of its pledged shares.
Last week, Reliance had accused L&T Finance and Edelweiss Group entities of "illegal" and "motivated" actions in invoking the pledged shares of Anil Ambani group's three listed firms and selling them in open market causing a steep fall in share values.
L&T Finance and Edelweiss Group had refuted the allegations and counter-alleged that Reliance Group failed to make timely payments, which they said necessitated sale of pledged shares.
Edelweiss said it had granted credit facilities against pledge of shares to Reliance Group and it reached out numerous times to the group to address concerns on shortfall in margins and resultant fall in collateral valuation.
It said liquidation of collateral was necessitated after Reliance Group continued to breach contractual obligations, and did not reply to an offer for remediation.
In its regulatory filing, Reliance Power had said its board reviewed the events leading to a sharp fall in market capitalisation 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".
Reliance Capital, on the other hand, said its over 7 lakh shareholders have been impacted by what it termed as "illegal, motivated and unwarranted actions of L&T Finance".
Reliance Infrastructure blamed L&T Finance for market value erosion, saying it has impacted its over 8 lakh shareholders.
In its letter to Sebi, Reliance Power has requested the regulator to issue a "cease and desist" directive to the concerned entities from engaging in "market abuse", prohibiting them, from trading in the securities markets, which allegedly led to sharp plunge in the group's share price.
It also asked Sebi to investigate the disruption of Reliance group shares that includes examination of the dealing room records, including records of phone calls and SMS of all persons at the broking firms where the majority of the sale transactions took place, and the relevant fund flows.
The promoters of Reliance Power had raised resources by pledging their shareholding in the company from Sebi regulated funds and NBFCs all belonging to Edelweiss Group.
A few NBFCs, "substantially L&T Finance and certain entities of Edelweiss Group, have invoked pledge of listed shares of Reliance Group and made open market sales of the value of approximately Rs 400 crore from February 4 to 7," the Reliance Group had said earlier on Friday.
"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," it had alleged.
The group said the actions have caused substantial losses to 72 lakh institutional and retail shareholders, and harming the interests of all stakeholders.
With inputs from PTI.