Govt looking into Reliance Infocomm shares' issue
Tuesday, March 15 2005 13:27 Hrs (IST) - World Time - 
New Delhi:
Government is looking into the issue of Reliance Infocomm Limited shares to ascertain whether any law has been violated in the allocation of one crore shares to three firms apparently at the rate of Re 1 each, Finance Minister P Chidambaram said in the Rajya Sabha today (Mar 15, 2005).
"We are looking to see if any law has been violated in the allocation of shares. The enquiry is not over. We will continue to look into it," he said responding to supplementaries.
"From the available balance sheets of the three companies, as at 31.3.2004, the price at which the three companies acquired shares in the erstwhile Reliance Infocomm Limited appears to be at Re 1 per share," the Minister said during Question Hour.
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Chidambaram said so far as complaints against Reliance Industries Limited (RIL) pertaining to security transactions were concerned, Security and Exchange Board of India (SEBI) was looking into the matter.
He said that if any corruption came to light, then some other authority could do the investigation. "But right now it is SEBI (which is going into it)."
Chidambaram said that according to information furnished by the Ministry of Company Affairs, three unlisted companies held shares in an unlisted public limited company - Reliance Infocomm Limited.
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Unlisted companies did not fall under the purview of SEBI, as they are not governed by SEBI, he said and added the Board of Governors of the company was free to allocate shares to anybody. But, if it has violated any guidelines prescribed by Telecom Regulatory Authority of India (TRAI), it was for the Communication Ministry to ascertain.
In his written reply, Chidambaram said that the shares were acquired on 12.9.2002 from K R Raja, C S Moghe and V K Gandhi by three companies -- M/s Prerana Auto Private Limited (33,00,000 shares), M/s Softnet Traders and Consultants Private Limited (33,00,000 shares) and M/s Fairever Traders and Consultants Private Limited (34,00,000 shares).
By an order of the Gujarat High Court on 16.12.2002, Reliance Infocomm Limited was amalgamated with M/s Information and Communications Limited, another unlisted company. Upon amalgamation the name of the amalgamated company was changed to Reliance Infocomm Limited, he said.
Earlier, members alleged that Reliance Infocomm Limited sold its share at Re 1 each to three insignificant companies when the market rate was Rs 250 each.
They alleged favouritism in the deal and demanded a high power enquiry into the matter to bring the culprits to book.
PTI
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