Mumbai: The Bombay High Court has rapped the Anil Ambani group company Reliance Power and its management for attempting to “mislead” the court by a petition that has “smacked of deceit.”
The sharp words came from Judge KR Shriram while hearing a Rs 2,700-crore defamation suit filed by Reliance Power against financial services group Edelweiss for selling its pledged shares earlier this month after a massive plunge in share value.
On February 13, the judge refused to grant any interim relief against Edelweiss or order a stay on the sale process, saying there was no prima facie merit in the plea, and that he would record the reasons for denying it interim relief later.
At the hearing on Thursday, the judge observed that the entire plea made by Reliance Power “smacked of deceit” and is an attempt by it to “mislead the court”.
The Reliance group had argued that the sale of its pledged shares by Edelweiss' ECL Finance was illegal and must be stopped as the sale is illegal and void, and sought a compensation of over Rs 2,700 crore for the fiscal and reputational losses.
As per the plea, Reliance and its sister company Reliance Communications had pledged some shares of various promoter companies with the Edelweiss group in lieu of a loan. Interestingly, even though the group had named L&T Finance also for selling pledged shares in a public statement on February 12, it did not take the company to the court.
On February 4, Reliance received a notice from Edelweiss notifying about the sale of its shares by the debenture holding companies. The next day, shares worth Rs 5.96 crore were sold apart from transferring some of the pledged shares to the debenture holders in the evening at a lower value.
The sale was made following the massive decline in Reliance group companies' shares after Reliance Communication sought to file for bankruptcy on February 1 and between February 1 and 19, the group lost almost 60 per cent of their share valuation.
Judge Shriram, however, took strong exception to the above arguments on reasonable notice both during the hearing and in his detailed order.
