Vishal Gupta 4 Report post Posted January 31, 2005 NO DISCRIMINATION IN SHARE ALLOTMENT IN RIC AND RCIL No differential price to the detriment of RIL Shareholders Mumbai, January 30, 2005 Over the past few weeks, vested interests are continuing an unabated tirade of disinformation and distortion about allotment of shares in Reliance Infocomm initiatives. In an attempt to intensify the campaign, for the last few days, misleading information is being spread through electronic and print media about these issues. This systematic and deliberate propaganda is targeted at Reliance Infocomm and its Chairman. The following facts about the equity pattern of RIC and RCIL make it clear that insinuations implicit in this disinformation campaign are totally false. It has been alleged through a certain section of the media that Reliance Infocomm Limited (RIC) and Reliance Communications Infrastructure Limited (RCIL) have allotted shares to Reliance Industries Limited and Corporates (MDA Investment Cos.) at different rates to the detriment of the RIL shareholders. This allegation is baseless. While financial analysts and experts can, no doubt, see through the deliberate misrepresentations, laypersons may be confused by sensationalisation and distortion of information available in the public domain. Therefore, at the very outset, we would like to restate that there has been no difference in either the share prices or the number of shares allotted to RIL or Corporates (MDA Investment Cos.). The correct facts are being presented once again about equity pattern of RCIL and RIC to make it abundantly clear that all transactions pertaining to the equity investments have been conducted in a manner that is fair to all the equity partners. RCIL EQUITY PATTERN * RCIL is the holding company of RIC. * The total equity base of RCIL is 200 crore shares. * Of these, 90 crore shares are allotted to Reliance Industries Limited and 90 crore shares are allotted to Corporates (MDA Investment Cos.). * The other 20 crore shares is held in a trust for Business Associates and Employees. * Initially, RCIL issued 81 crore shares each to Reliance Industries Limited and Corporates (MDA Investment Cos.) at par (i.e. Rs. 1 each). * Subsequently, RCIL issued 9 crore shares each at Rs.250 to both Reliance Industries Limited and Corporates (MDA Investment Cos.). * It is clear that a total of 90 crore shares each at an aggregate price of Rs.2331 crore averaging to Rs.25.90 per share were issued to both Reliance Industries Limited and Corporates (MDA Investment Cos.) at the same terms, price and time. So, the allegation that RIL has been issued shares at Rs.250 and the others at par is totally baseless. Both RIL and Corporates (MDA Investment Cos.) have been issued the same number of shares at the same price at the same time. Hence the question of any discrimination to Reliance Industries Limited or loss to its shareholders does not arise at all. RIC EQUITY PATTERN * RIC is the operating company pursuing major infocomm business activities. * The total equity base of RIC is 416.35 crore shares. * RCIL, the holding company of RIC holds 321.85 crore shares by investing an amount of Rs.2941.17 crore at an average price of Rs. 9.13. * In addition to this, RIC has issued 31.5 crore shares each at par (i.e. Rs.1) to the following three categories : a. Reliance Industries Limited b. Corporates (MDA Investment Cos. and Associates) c. Trust for Business Associates and Employees So, it is clear that RIC has not issued any shares at a price of Rs.250 to any investor. Additionally, there is no discrimination in the allotment of shares between Reliance Industries Limited and Corporates (MDA Investment Cos. and Associates). Share this post Link to post Share on other sites
