The Hindu : Business : RPL directed to lock-in promoters’ quota

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Friday, Dec 28, 2007
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RPL directed to lock-in promoters’ quota

Special Correspondent

MUMBAI: The Securities and Exchange Board of India (SEBI) on Thursday directed Reliance Power Ltd (RPL) to lock-in the entire promoters’ quota of 20 per cent for five years from the date of allotment in its proposed initial public offering (IPO).

SEBI order

In an order issued on Thursday, SEBI whole-time director T. C. Nair stated, “In view of the findings, in exercise of the powers under Sec. 11 and 11A of the SEBI Act, we direct that the equity shares acquired by the promoters of RPL at the face value of Rs. 10 each pursuant to scheme of merger or amalgamation approved by the High Court of Bombay would be eligible for computation of promoters’ contribution.”

SEBI also directed RPL and its lead merchant banker in respect of its proposed IPO to ensure that all disclosures as per the Companies Act and DIP (Disclosure of Investor Protection) Guidelines and as per the observation and changes suggested by SEBI on the Draft Red Herring Prospectus (DRHP) filed on behalf of RPL.

In a comapliant filed by Rajkot Saher/Jilla Grhak Surksha Mandel through a PIL at the High Court Mumbai, the Court has directed SEBI to deal and dispose of the representation of the complainant filed by them on October 18, 2007.

This is in relation to DRHP filed by Reliance Power Ltd. (RPL) with SEBI on October 3, 2007. The complainant has stated that there has been a serious breach of corporate governance in the case of Reliance Energy Limited (REL) and RPL. It has submitted that the promoters of REL have transferred certain high value projects such as Rosa Power, Sasan Power, Butibori, Shahpur Coal, Shahpur Gas, Urthing Sobla and Dadri to a company which is owned 50 per cent by REL and 50 per cent by the promoters of REL.

It is further alleged that in the context of the proposed IPO of RPL, the promoters of RPL have, in an attempt to subvert the spirit of clause 4.6 of the DIP Guidelines, gained huge benefits using several front companies.

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