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SEBI to look into sale of pledged shares of Reliance Group’s 3 listed firms – Moneycontrol.com


Market regulator SEBI is looking into allegations and counter-allegations related to the sale of pledged shares of Anil Ambani-led Reliance Group’s three listed firms by two lenders, senior officials said on February 11.Reliance Group has accused L&T Finance and Edelweiss Group entities of “illegal” and “motivated” actions in invoking the pledged shares of Anil Ambani group firms and selling them in the open market causing a steep fall in share values.L&T Finance and Edelweiss Group have refuted the allegations and have counter-alleged that Reliance Group failed to make timely payments, which they said necessitated the sale of pledged shares.A source close to the development told Moneycontrol, “Sebi can’t intervene in market operations and will seek data from the exchange about the trade on Friday. The data usually comes in two days.””If it is a case of default of margin then it would be difficult for SEBI to take any action against Edelweiss and L&T Finance. However,  surveillance is analysing the data of trades.”The regulator will subsequently examine whether there was any violation of regulations relating to insider trading and disclosure norms, the official said.Reliance group had said, “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 approx. Rs. 400 crore from 4.2.2019 to 7.2.2019. The illegal, motivated and wholly unjustified action by the above 2 groups has precipitated a fall of Rs. 13,000 crore, an unprecedented nearly 55 percent, in market capitalisation of Reliance Group over just these four short days, causing substantial losses to 72 lakh institutional and retail shareholders, and harming the interests of all stakeholders.”Reliance Power had already written to SEBI to investigate the matter and impose a restraint on entities that pressed huge sale orders significantly below the prevailing market price and investigate the matter in depth.Similar complaints are expected to be filed by Reliance Capital and Reliance Infrastructure as well.When contacted, a Reliance Group spokesperson said, “As resolved by the boards of various group companies, we will take all legal steps necessary to protect and enhance the value of our stakeholders, including pursuing the matter with an appropriate regulator.”Earlier on Saturday, boards of three listed companies of the group — Reliance Power, Reliance Infra and Reliance Capital — had approved and recommended “all appropriate legal steps” to protect shareholders’ value.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”.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 percent, 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.Refuting the allegations, L&T Finance had said it had granted loans against pledge of shares to Reliance ADAG Group companies and it had to invoke its rights of invocation after defaults continued despite various notices in past few months.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 a 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.With inputs from PTI

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