RCom accused L&T Finance and Edelweiss Group of illegally invoking pledge of listed shares leading to a 55% drop in market capitalisation in just four days.
Axis Trustee Services, acting as debenture trustee, and private lender IndusInd Bank invoked a total of 15.6% pledged shareholding in Reliance Communications, according to a stock exchange notice by the company on Thursday. While IndusInd Bank invoked 4.52% of the total of 9.37% pledged to it, Axis Trustee invoked pledged shares of 11.08% in RCom. The pledges were invoked between March 25 and March 27, according to the stock exchange filing.
According to a Bloomberg report, consequently, Anil Ambani group’s stake in RCom fell to 21.97% from 37.57% after two firms invoked, or sold, shares that the group had pledged to them. Shares of RCom, which had fallen over 18% in the last four days, declined 4.8% in intraday trade on Thursday and hit the lower circuit of Rs 4.35 on the BSE. The share price has fallen 32.9% in the last one month, according to Bloomberg data.
Earlier in February, RCom’s share price had taken a severe blow after L&T Finance and Edelweiss Group invoked pledge of company’s listed shares. RCom accused L&T Finance and Edelweiss Group of illegally invoking pledge of listed shares leading to a 55% drop in market capitalisation in just four days. In its statement, the group had said L&T Finance and certain entities of Edelweiss Group invoked pledge of listed shares of Reliance Group and made open market sales of the value of about Rs 400 crore from February 4 to February 7.
The group had alleged that the manner of conduct of the open market sales by L&T Finance and Edelweiss is illegal on several counts, including price manipulation, insider trading, front running and market abuse, among others and is in violation of various regulatory provisions.
The group had also reiterated that Reliance Capital, Reliance Infrastructure and Reliance Power (and their various subsidiaries) are performing satisfactorily on all operating parameters, and there is no change whatsoever on any aspect as compared to the position prevailing prior to these sales.
Later, the Reliance group companies had moved the Bombay High Court seeking damages from Edelweiss for selling its shares “illegally”. According to reports, on March 12, the high court asked Reliance group companies and Edelweiss’ non-banking financial arm ECL Finance to find a workable solution out of court.