The Hindu : Business : Reliance episode hits sentiment

Online edition of India's National Newspaper
Friday, Nov 26, 2004

Business

Business

Reliance episode hits sentiment

MUMBAI, NOV. 25. Once again, the Reliance group acted as a spoilsport and the market crashed from the day's high to end flat as investors resorted to heavy selling reacting to the news of resignation of six members of the board of directors of Reliance Energy Ltd.

In a knee-jerk reaction, the BSE benchmark 30-share index nosedived to the intra-day low of 6014.98 before ending the day at 6035.03 against yesterday's close of 6035.95. During first half of the session, the Sensex had risen to the high of 6081.74 after a hesitant start at 6034.72.

Operators attempted to square up positions on the last trading day for November contract of derivatives segment as also ahead of a long weekend with a public holiday tomorrow.

The market took a dramatic downturn after the news of resignation by REL's six directors spread like a wild fire on the bourses. Without giving any reason, directors Satish Sheth, S. C. Gupta, A. H. Mankad, J. P. Chalsani, J. Ramchandran and Amitabh Jhunjhunwala resigned from the REL board.

The Reliance group is in the news for over a week following remarks over `ownership issues' by Mukesh Ambani, Chairman and Managing Director of RIL, which led to widespread speculations about differences between the Ambani brothers. REL is headed by Anil Ambani as the Chairman and Managing Director, who was expected to make a public statement on the issue but has so far maintained silence.

Reliance group shares, REL, RIL, IPCL, Reliance Capital and Reliance Industrial Infrastructure suffered sharp losses.

PTI

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