Reliance Power asks Sebi to ban Edelweiss from trading for 'market abuse'
BusinessToday.In February 11, 2019
Anil Ambani-led Reliance Power has asked the capital market regulator Securities and Exchange Board of India (Sebi) to ban Edelweiss Financial Services Group from trading in the securities market, suggested a media report. The Reliance Group company in a letter dated February 6 asked Sebi to issue a "cease and desist" instruction for Edelweiss from engaging in "market abuse", which allegedly led to its share price plunging 57 per cent in two days, as per Business Standard report.
The Anil Ambani Group companies' shares witnessed a heavy selling pressure last week after its telecom arm Reliance Communications announced its decision to move the insolvency tribunal for bankruptcy protection. Shares of Reliance Power plunged as much as 59 per cent last week, followed by Reliance Infra (56 per cent), Reliance Communications (54 per cent), and Reliance Capital 32 per cent.
The duo invoked pledged shares worth Rs 552.17 crore in the Anil Ambani-led Reliance Group companies after the announcement of insolvency proceedings by Reliance Communications on February 1.
In its letter, Reliance Power asked Sebi to investigate this disruption of Reliance Group (Anil Ambani's) shares, "which include examination of the dealing room records, including records of phone calls and SMS of all persons at the broking firms where the bulk of the sale transactions took place, and the relevant fund flows", according to a Business Standard report.
In a separate filing to the Bombay Stock Exchange, the Reliance Group has accused its lenders L&T Finance and Edelweiss NSE of illegally invoking pledged shares, calling it "motivated and unwarranted".
The letter alleged that 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, causing substantial losses to 72 lakh institutional and retail shareholders, and harming the interests of all stakeholders.
The company added that it opted for "liquidation of the collateral as per the agreed contractual terms" after giving a due opportunity for remediation and in absence of a response from Reliance ADAG Group in the face of a sharp drop in the prices of Reliance Group shares on February 4.
Rejecting the allegations, Edelweiss Group said the claims made by Reliance Group are entirely unfounded and baseless. The company said it had acted responsibly at all times, not only in safeguarding the interests of its investors but also in ensuring that market integrity was maintained. The Anil Ambani Group companies have also warned that they would take all appropriate legal steps to protect and enhance the value of all its stakeholders.
Meanwhile, shares of company were trading at Rs 11.05 apiece, up 1.38 per cent, from previous close on the BSE at 2:10 PM.
Edited by Chitranjan Kumar