Professional Ideas

New Delhi, An association of investors in Anil Ambani-led

Reliance Energy today alleged that the planned IPO of Group Company

Reliance Power will erode the value for REL shareholders, but ADAG termed

it as a “vicious campaign” by vested industrial interests.



“A close study of draft prospectus reveals that the power generation

business opportunities secured in the name of REL and secured with the

strength of REL have been transformed to RPL by means of some internal

MoUs and understandings,” REL Investors Forum said in a faxed press

release.



“The shareholders of REL have been deprived of the entire power generation

business prospects to be accrued to them. By means of such a transfer of

business and creation of another shell company to issue public shares, now

the power generation profits will accrue to the new company in which Anil

Ambani holds 50 per cent.” Investors in REL are feeling cheated with ADA

group company RPL’s proposed public issue, it noted.



When contacted, REL Investors Forum Secretary ‘Veekay’, whose name was

mentioned on the release along with two other persons — Prakash Krishnan

and Anil Upadhyaya – said that the forum members include 60-70

shareholders of REL.



“We are looking at taking legal recourse to safeguard the interest of REL

shareholders,” Veekay said, adding the forum was also writing to other

shareholders to join the campaign.



However, a Reliance ADA Group spokesperson said in a statement, “Vicious

campaign of disinformation (is) underway by vicious industrial interests

to stall Reliance Power IPO.”

The spokesperson said attempts were underway to engineer motivated

litigation and the “campaign was motivated by frustration at continuing

success and rising valuation of ADA group”. Reliance Power’s IPO was

awaiting SEBI approval in normal course, the official added.



When asked to comment on ADAG’s view that the campaign was being promoted

by some vested industrial interests, the forum secretary denied any links

to any rival of the group.



“We have not been approached by any group… It’s just an initiative of

REL shareholders,” he said, when asked whether they have been contacted by

rivals.



The Reliance ADA group spokesperson said that forged letters by Members of

Parliament based on false and baseless allegations were also also part of

the vicious campaign.



The forum said in its press release that the new company being created had

no resources for executing projects and was dependent on REL for

technical, manpower and commissioning support as well as for guarantees

for raising finances.



“The Anil Ambani group is planning to charge a huge premium from the

public for the Reliance Power shares, but ADAG’s investment companies and

REL have been alloted 210 crore shares at face value of Rs 2 per share and

only 16 crore shares will be alloted to the promoters at the same price as

the public,” it added.



Reliance Power proposes to come out with an IPO of 160 crore shares to

part fund 12 power projects envisaging an investment of nearly Rs 100,000

crore. The IPO is being pegged as the biggest ever in India with a total

estimated proceed of about Rs 12,000 crore.

Bangalore,Reliance Retail Limited (RRL) announced the launch of a new specialty store “Reliance TimeOut” on Cunningham Road in Bangalore today. This store houses Books, Music, Stationery, Toys and Gifts. After the successful launch of Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint, Reliance Wellness and Reliance Jewels, this is the 8th format of stores from Reliance Retail to be launched in India.

Spread over 21,000 sq feet and with over 56,000 products, Reliance TimeOut offers the customers an extensive range of merchandise in Books, Music, Stationery, Toys and Gifts. Reliance TimeOut is all set to revolutionize this business with its unique combination of wide product range and an exciting customer experience.

Commenting on the launch of Reliance TimeOut, Mr. Bijou Kurien, President and Chief Executive Lifestyle said “In today’s world, with all the pressures, stress and workload at office, home and school, we need a place where we can unwind and relax, where we can browse, buy a book, sample some music, choose a gift, buy a toy, or some exclusive stationery for ourselves. At Reliance Timeout, we offer a comprehensive range of products in these categories along with a fascinating customer experience in a warm, lively ambience”.

In Books, Reliance TimeOut has over 30,000 titles, sourced from National & International publishers. Recognizing customer preference for self-help and professional development the store has an impressive range of non-fiction books. Reliance TimeOut also has a range of Academic and Professional books and Vernacular books in 6 languages, apart from fiction, popular genres and a huge children’s section. To help enhance this experience the store has a kid’s wall, where kids can cuddle-up with a book. In Music and Movies Reliance TimeOut has over 12,000 titles sourced from leading international and national music companies. Listening pleasure is enhanced by the imported sound domes which provide hygienic sampling of music. Reliance TimeOut also has a Karaoke Studio where the customer can sing-along with a song of their choice and record it in a professional quality recording studio. There is also a cafe at the store, which makes Reliance TimeOut a wonderful hangout for youth and adults alike.

Searching for your favourite music and books is efficiently handled by a search engine and complemented by knowledgeable and energetic staff, so that customers can easily find what they want in a store of this size. The Stationery section with over 7000 products is a wonderland for children, students and working people. For the first time in India, Professional Artists too have an exciting range of products to buy their art supplies from. The professional series from Pebeo and Canson from France, Vinciana and RGM from Italy and Koh-i-noor from the Czech Republic and the Hobby Art products are truly exceptional. The Toy section with over 3,000 toys in an environment that is a lot of fun for the children will definitely make every outing to Reliance TimeOut, great fun for the family. The store also has over 4,000 products in gifts, watches, sunglasses and fragrances.Reliance TimeOut is truly a wonderful space to simply take time out! A wonderful world where a customer can Explore, Create, Imagine, Play, Unwind and truly call their own.

Reliance Retail Limited

Reliance Retail Limited, a 100% subsidiary of Reliance Industries Limited started rolling its stores in November last year and today operates over 418 stores in over 17 cities spanning 1.5 million Sq ft. The formats that RRL operates in are Reliance Fresh, Reliance Digital for consumer durables and information technology, Reliance Mart, a Hyper Market, Reliance Trendz – the apparel store, Reliance Wellness – offering wellness products, Reliance Footprint -a footwear store & Reliance Jewels -a jewellery store.

Reliance Industries Limited

Reliance Industries Limited (RIL) is India’s largest private sector company on all major financial parameters with turnover of Rs1,18,354 crore (US$ 27.23 billion), cash profit of Rs17,678 crore (US$ 4.07 billion), net profit of Rs11,943 crore (US$ 2.75 billion) and net worth of Rs63,967 crore (US$ 14.72 billion) as of March 31, 2007.

RIL is the first and only private sector company from India to feature in the Fortune Global 500 list of ‘World’s Largest Corporations’ and ranks amongst the world’s Top 200 companies in terms of profits. RIL is amongst the 25 fastest climbers ranked by Fortune. RIL also features in the Forbes Global list of world’s 400 best big companies and in FT Global 500 list of world’s largest companies.

The Finance Ministry has asked SEBI to look into the alleged irregularities in the Reliance Power IPO. This follows representations from a large number of people including MPs and MLAs. The public issue is awaiting clearance from SEBI.

The finance ministry now wants the regulatory to scan the irregularities related to the securities laws and the Companies Act mentioned by MPs, MLAs and some organisations. In a letter dated October 23, Mr. K P Krishnan, IAS, joint secretary in the ministry, has also asked for a report from SEBI on the irregularities mentioned in the representations sent to the ministry. The letter is addressed to SEBI chairman M Damodaran.

“I request SEBI to take appropriate action in the matter and send a factual note on this issue expeditiously,” says the letter. A copy of the communication has also been marked to the Company Affairs Ministry.

Recently, the Companies Affairs Ministry had also sent a similar communication to SEBI. The action by both ministries is likely to result in a thorough probe into irregularities in the Reliance Power IPO.

SEBI has already sought clarifications from the lead managers to the issue and clearance has not been provided so far. Among the allegations made by various sections is that the promoters have issued a huge volume of securities to themselves at par while asking investors for a premium.

A number of organisations including an Investors Forum raised the issued recently, but the Anil Ambani Group did not reply to the charges. Instead, it was alleged that Reliance Industries had launched a ‘vicious’ campaign against the IPO.

While the Anil Ambani Group has complained to the SEBI that RIL officials are behind the expose, the regulator has also received a large number of complaints from investors of Reliance Energy. The power projects of Reliance Energy have been transferred to Reliance Power in an effort to bring in business into the company, which was virtually a shell till recently. Reliance Energy stands to lose out due to the structure of the transaction while Anil Ambani’s wealth is expected to skyrocket at the cost of investors.

The finance ministry letter lists out the individuals and organisations submitting representations on the Reliance Power IPO. The ministry has asked for a SEBI probe to protect investor interest.

The Anil Ambani Group did not inform stock exchanges about transfer of power projects to Reliance Energy. Nor did it obtain clearance of shareholders for transfer of these project which will make Reliance Energy just a contractor for implementing projects.