No discrimination in the allotment of shares: RIC
Sunday, January 30 2005 19:10 Hrs (IST) - World Time - 
Mumbai:
Caught in a controversy over reported allocation of its shares to privately held companies at much lower price than those given to Reliance Industries, Mukesh Ambani controlled Reliance Infocomm today (Jan 30, 2005) dismissed the reports as 'totally false and baseless'.
Asserting that there was no discrimination in the share allotment, a statement from Reliance Infocomm said "the systematic and deliberate propaganda is targeted at Reliance Infocomm and its Chairman."
It said it has been alleged that Reliance Infocomm (RIC) and Reliance Communications Infrastructure Limited (RCIL) have allotted shares to Reliance Industries Limited (RIL) and Corporates (MDA Investments Companies) at different rates to the detriment of the RIL shareholders. "This allegation is baseless."
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Detailing the equity pattern of RCIL, the holding company of Reliance Infocomm, it said both RIL and Corporates (MDA Investment Companies) 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," the statement said.
The statement from Reliance Infocomm comes amidst spate of reports that flagship Reliance Industries was given Infocomm shares for upto Rs 250 a share against a host of privately held companies, including some of Mukesh Ambani, for a price of only Re 1.
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Giving details of share allotments of RCIL, the statement said RCIL is the holding company of RIC whose total equity base is 200 crore shares.
Of these, 90 crore shares are allotted to Reliance Industries Limited and 90 crore shares are allotted to MDA Investment Companies.
The other 20 crore shares are held in a trust for Business Associates and Employees.
Initially, RCIL issued 81 crore shares each to RIL and Corporates (MDA Investment Cos) at par (i.e. Rs one each) but subsequently, RCIL issued 9 crore more shares each at Rs 250 to both RIL and MDA Investment Companies.
It is clear that a total of 90 crore shares each at an aggregate price of Rs 2,331 crore averaging to Rs 25.90 per share were issued to both RIL and MDA Investment Companies at the same terms, price and time, it said.
"While financial analysts and experts can, no doubt, see through the deliberate misrepresentations, lay persons may be confused by sensationalisation and distortion of information available in the public domain," it added.
RIC is the operating company pursuing major infocomm business activities whose equity base 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, the statement said.
In addition to this, RIC has issued 31.5 crore shares each at Re 1 per share to RIL, MDA Investment Companies and Trust for Business Associates and Employees, the company said.
"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 RIL and MDA Investment Cos and Associates," it added.
PTI
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