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Mumbai, Jan. 30

IN the ongoing stand-off between the Ambani brothers, the Reliance Group today dismissed as baseless, allegations that Reliance Infocomm Ltd (RIC) and Reliance Communications Infrastructure Ltd (RCIL) allotted shares to Reliance Industries Ltd and corporates (MDA Investment Cos) at differential rates, to the detriment of RIL shareholders.

"This allegation is baseless," Reliance informed in a statement out of Dhirubhai Ambani Knowledge City.

There were reports that Reliance Infocomm shares were allotted at a discounted price to four companies, one of them controlled by a close confidante of the RIL Chairman, Mr Mukesh Ambani.

According to today's statement, RCIL, the holding company of RIC, has a total equity base of 200 crore shares. Of these, 90 crore shares were allotted to RIL and another 90 crore to corporates (MDA Investment Cos). The balance 20 crore shares are held in a trust for business associates and employees.

Initially, RCIL issued 81 crore shares to RIL and corporates (MDA Investment Cos) at par, that is, one rupee each. Subsequently, RCIL issued nine crore shares, each at Rs 250, to both RIL and corporates (MDA Investment Cos).

"It is clear that a total of 90 crore shares each, at an aggregate price of Rs 2,331 crore averaging to Rs 25.90 per share, were issued to both Reliance Industries Ltd and corporates (MDA Investment Cos) at the same terms, price and time.

"So, the allegation that RIL has been issued shares at Rs 250 and the others at par, is totally baseless," the statement said, adding, "the question of any discrimination to Reliance Industries Ltd or loss to its shareholders does not arise at all."

RIC, the operating company pursuing major infocomm business activities, has a total equity base of 416.35 crore shares. By investing an amount of Rs 2,941.17 crore, RCIL, the holding company of RIC, holds 321.85 crore shares at an average price of Rs 9.13.

In addition, RIC has issued 31.5 crore shares, each at par (that is, one rupee), to Reliance Industries Ltd, corporates (MDA Investment Cos and Associates) and Trust for Business Associates and Employees.

"So, it is clear that RIC has not issued any shares at a price of Rs 250 to any investor. There is no discrimination in the allotment of shares between Reliance Industries Ltd and corporates (MDA Investment Cos and Associates)," the statement said.

(This article was published in the Business Line print edition dated January 31, 2005)
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