The Reliance Power drama continues …
News reports say that “Anil Ambani Group Company Reliance Power on Wednesday said it has asked shareholders to make balance payment by February 26 on shares allotted to them in the IPO to be eligible for bonus shares”
Retail Investors : Only those who had applied for 225 shares @430 were allotted 15 shares in the first place. Although the part payment facility was available, it was much more than the value of 15 x 430 and the same was refunded. So for the retail investors, there is no question of paying up the balance amount.
I do not know who is supposed to pay the balance. Will Reliance Power clarify?
We have consistently held the view that there is no need to compensate shareholders for their “loss” on listing and we continue to do so. And the use of Bonus Shares for a company that is yet to start production is highly questionable and debatable (only who will debate!!)
And if the company genuinely believes that the affected shareholders should be helped to partially or fully offset the losses that they have sustained, then there is no need to have any record date for this purpose. The Company can just issue Bonus shares to the same people to which it sent the original allotment letters in the approved ratio.
Giving the bonus shares to those who purchased the shares in the secondary market at the 300+ levels on the grounds of offsetting losses is ridiculous because they would have already booked profits or seen their paper profits go up substantially. By doing so, it will amount to penalising the original shareholders who sold their holdings at a loss.
If there is a record date which is anything other than the listing date, then there is a possibility of the entire fiasco turned into an advantage by those closer to the Promoters. What stops the promoters or their agents from buying the shares at those depressed prices and also gaining the bonus shares, given that they are the same people who announced the bonus shares itself!
Hopefully, someone will clear the mess! Will it be SEBI?
Asha says:
Added on February 22nd, 2008 at 9:25 amSEBI will not do anything my friend. I just happened to read another article which mentions that Mukesh Ambani is behind the stock market crash. Isin’t it is sad to know that Mukesh Ambani has done all this just to make the Reliance Power share unsuccessful. You also can read the article on http://rilfraud.blogspot.com/2008/02/reliance-industries-ril-mukesh-ambani.html and this link also talks about all the fraud that Reliance Industries has been doing.
I’m glad that Economic Times has also taken this up and published but not put in details.