Our Bureau

Mumbai, Jan. 25

THE controversy over allotment of shares in Reliance Infocomm took a new turn today with allegations that a close confidant of Mr Mukesh Ambani was issued shares at a discounted price.

According to Reliance sources, a company called Kaizen Commercial Private Ltd, wholly owned by Mr Manoj Modi and his wife Ms Smita Modi, was allotted 3 crore shares in Reliance Infocomm at Re 1 each in April 2001.

This is in contrast to RIL's investment in Reliance Infocomm and its group companies at Rs 250 per share, also in April 2001, they said.

Mr Manoj Modi's investment of Rs 3 crore is now worth Rs 500 crore, they said, this calculation being based on the valuation of Reliance Infocomm at Rs 50,000 crore by Merrill Lynch.

The gain of Rs 497 crore to Mr Manoj Modi is at the cost of 30 lakh RIL shareholders, they said.

According to them, Reliance Infocomm has always been reported to be owned 45 per cent by RIL, 45 per cent by the Ambani family and 10 per cent by employee trusts. Some time ago these sources had made allegations about the business dealings of Mr Anand Jain (another close confidante of Mr Mukesh Ambani) with RIL.

Mr Manoj Modi was not available for his response to the allegations.

(This article was published in the Business Line print edition dated January 26, 2005)
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