Anil takes brothers? row to FM | india | Hindustan Times
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Anil takes brothers? row to FM

The latest round of trouble between the Ambanis has reached PC, who is learnt to have given Anil a patient hearing.

india Updated: Feb 07, 2006 03:21 IST

The latest round of trouble between the Ambani brothers reached Finance Minister P Chidambaram on Monday. The FM is learnt to have given Anil Ambani a patient hearing.

At the heart of the matter is the irrevocable power of attorney that the Mukesh Ambani-owned RIL had given Anil Ambani's Anil Dhirubhai Ambani Group as part of the June 18, 2005 settlement scripted by their mother Kokilaben Ambani. The power of attorney enables the share transfer of the four new entities as part of the Mumbai High Court's December 9, 2005 demerger order.

Trouble began on Friday last when the RIL allegedly tried to prevent the ADAG from implementing the PoA.

ADAG wrote to JM Morgan Stanley Financial Services PVT Ltd (Depository Participant) stating that the request by transferor companies to rematerialise shares under PoA to the ADAG is in bad faith, malafide.

It further said that the request was meant to defeat the PoA granted by the transferor companies in acceptance of their obligation to transfer the shares to ADAG.

ADAG alleges that RIL has tried to stop the share transfer by getting the demat shares converted into physical form. An ADAG spokesperson said, “if the shares had got converted to physical form, the POAs would have become useless, because the share certificates would have vested with RIL.”

A barrage of legal notices followed to Mukesh Ambani owned companies, JM Financial and Karvy Consultants warning of criminal proceedings if the shares were converted. Signed by Satish Seth and Gautam Doshi, the letters say: “Any consideration of the request for rematting the shares would be assisting in a malafide fraudulent action being taken by our clients. Any such participation in fraudulent actions will attract all the attendant consequences of such action, including civil and criminal liabilities."

Mukesh Ambani’s key aide Sandeep Tandon, a former revenue service officer who handles taxation matters, dismissed the allegations. Asserting that the listing of the demerged companies had to be done by RIL, he said: “We just want to do the listing before handing over control of the companies to protect the interest of the shareholders. But there have been continued attempts by the Anil camp to block that process.”

He also refuted allegations of delay in the share transfer saying: “The process is on and will be completed soon. There is no criminality. If they think there is any criminal intention, they should file a criminal case against me. Once listing is done we will hand over the companies to ADAG.”

However, according to ADAG, the slew of legal notices had reportedly deterred the Mukesh group and late on Saturday afternoon, attempts were withdrawn to convert the shares.

Finally on February 4, ADAG sent off a letter to Karvy Computershare stating that ADAG are the only authorised persons to control and give directions on the affairs of the resultant companies.