Anil Ambani’s Reliance Group entities, namely Reliance Project Ventures and Management, Reliance Wind Turbine Installators Industries, Reliance Infrastructure have on Monday, sent a letter to SEBI Chairman Ajay Tyagi requesting an immediate ban on Edelweiss Group from the capital markets and for an in-depth investigation into the alleged illegal sale of pledged shares.

These three ADAG entities collectively hold 75 per cent in a listed entity Reliance Power whose shares plunged over 50 per cent — from ₹27.2 to ₹11.7 — in just two trading sessions. Reliance Group has blamed “illegal actions” of Edelweiss Group for the sharp fall in the share value.

In the letter to SEBI, reviewed by BusinessLine , Reliance Group entities note that they had raised resources at different points in time by issuing debentures aggregating to ₹685 crore to four Edelweiss Group entities, namely Edelweiss Special Opportunities Fund, Edelweiss Credit Opportunities Fund, Edelweiss Commodities Services and ECL Finance.

IDBI Trusteeship Services was appointed as trustee for the debenture holders under the various facilities. The debentures were secured by creating pledge in favour of the debenture trustee, on the Reliance Group’s entities’ shares in RPower. According to the letter, all powers related to enforcing the security, involving the pledge, selling and appropriating the proceeds were with the debenture trustee.

However, the letter argues, Edelweiss Group entities “usurped the powers of the debenture trustee” and “illegally and in a pre-mediated manner, themselves started dumping huge quantities of RPower shares and futures in the open market” on February 4 and February, 5 which lead to dramatic drop in stock prices.

Reliance Group entities have requested SEBI to investigate the matter and declare Edelweiss Group entities as not “fit and proper persons” and “impose a ban on each of them in the capital markets and all related activities” as well as impose penalties, if appropriate.

“We have always, and will continue to respect the law of the land. We do not want to be drawn into any unnecessary controversy. Regardless the matter is in court,” Edelweiss spokesperson said commenting on the allegations.

The development comes after last week Reliance Group has blamed L&T Finance Services and Edelweiss Group for ‘illegal” open market sale of its pledged shares that led to a fall of ₹13,000 crore in market capitalisation of the group companies and causing loss to 72 lakh shareholders.

Both L&T Finance and Edelweiss had refuted allegations noting they had to invoke their rights after multiple notices to Reliance Group companies.

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