International BusinessRoC gives clean chit to RIL-Reliance Petro merger
The Registrar of Companies has given a clean chit to Reliance Industries, while disposing of complaints that its merger with Reliance Petroleum would benefit only promoter Mukesh Ambani.
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"...It seems that company (RIL) has not violated any provision of the Companies Act, 1956", said Mumbai office of the Registrar of Companies (RoC), an arm of the Corporate Affairs Ministry, after inquiring into a complaint by a little-known investor body Indian Council of Investors.
The Council, in its complaint, had alleged that RIL-RPL merger was not in the interest of the shareholders and aimed at benefiting Mukesh Ambani personally.
Even a Member of Parliament Abani Roy, who filed a complaint against the RIL-RPL merger with the RoC Mumbai, later withdrew his application stating that "merger scheme ...Is beneficial and advantageous to even an ordinary shareholder. It appears from reports that process of merger is taking place in compliance with all existing rules and regulations."
RIL and RPL are in the process of obtaining statutory clearances for the merger scheme, which was approved by boards of both the companies on March 2, 2009. Responding to queries by the RoC, RIL had clarified that "all allegations are baseless, motivated and recklessly made... At the behest of interests adverse to company and the public in general and shareholders...In particular.
"The purpose of the complaint appears to be (to) make illegal gains and profit or to attempt to somehow to delay the process of the said amalgamation of RIL and RPL", it added.
In its point-wise rebuttal to the allegations, RIL said it obtained valuation reports from globally-reputed consultants Ernst and Young (E&Y) and Morgan Stanley before deciding the share exchange ratio.
Under the agreed ratio, RPL shareholders will get one RIL share for 16 RPL shares.
Moreover, it added, the companies also obtained the opinion of Citigroup and DSP Merill Lynch which certified the exchange ratio to be "fair and just".
In its report, K R Chandratre, company secretary and former president of the Institute of the Company Secretaries of India (ICSI) denied charges of insider trading in RPL shares, saying "all applicable disclosures required under SEBI regulations and Act has been made by the Company (RIL)."