The government on Tuesday said it would take “seriously” market regulator Sebi’s letter for appropriate action against Reliance Industries Ltd (RIL) for alleged routing of funds to dummy companies for buying its own shares in 2000.

“Sebi’s letter has to be taken seriously... The government does not want to anticipate anything. If Sebi has taken nine years, let us take at least nine days,” Corporate Affairs Minister Samlam Khurshid said, but cautioned that nobody would be allowed to “dig old graves.”

Asked for his comments on Sebi’s communication to the Ministry earlier this month, he told reporters, “The regulator will do its work. If anybody tries to exert pressure, we will not work under pressure.”

Sebi was probing a complaint by S. Gurumurthy of Swadeshi Jagran Manch alleging that RIL and its investors lost at least Rs. 2,700 crore in issuance of shares at a much lower price than what was allocated to the state-owned UTI.

After taking the opinion of retired Supreme Court Justice B.N. Srikrishna on its own investigation report, Sebi had asked the Ministry to take “appropriate action” against RIL for sale of 12 crore shares, representing over 11 per cent of total equity, through this route.

If anybody tries to do a post mortem by digging old graves, then we will rather focus on the work forward than engage in post mortem,” Mr. Khurshid said, adding that RIL had been demerged since then.

The Reliance empire was divided in 2005 as part of a settlement between the warring Ambani brothers.

“I don’t want to anticipate or say something... this is not a policy decision. There are officials to look after these things,” he said, when asked about the allegations that the sale of 12 crore shares was done for the benefit of promoters.

Sebi, in its letter to the Corporate Affairs Ministry, had said that the matter of “irregular issue of privately placed debenture (PPD) IV and V by RIL” are being referred for “consideration and appropriate action.”

Gurumurthy, in his complaint, had alleged that the core of the fraud was the criminal misappropriation amounting to virtual smuggling out of RIL (through non convertible debentures) of 12 crore shares of the company in 2000 representing 11.38 per cent of the equity capital.


Companies Bill & social accountability October 3, 2009

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