Criminal investigation ordered in the Anil Ambani case ...

In a talk I had with my friend from India today, he mentioned about the case he filed last Novemebr 2007 against one of the biggest and most influential people in his country. Coming from an Asian country like him and knowing how money and power can often influence the outcome of investigations, I can only wish him luck in his efforts and hope that many benefit in the end. I am sure justice will find its way where it is due....

Below is the press release on the case. I am posting this in support of his advocacy for truth and efforts against graft and corruption.

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On 29th November 2007, Honorable Justice Smt. K. K. Patil of JFMC (Anti-Corruption) Pune, ordered investigation of offences, of criminal breach of trust and criminal conspiracy to strip, the 13 lakh shareholders of Reliance Capital Ltd, off a valuable property. Besides Mr. Anil Ambani, the other accused are Mr. Amitabh Jhunjhunwala, Mr. Rajendra P. Chitale and Mr. C. P. Jain ( the other Directors of RCL ). Criminal complaint 4134 / 2007, has been filed by a RCL shareholder Mr. V. M. Raste. He is also the convener of Corporate Watch, a not for profit organisation. Advocate Mr. Rohan V. Nahar appeared on behalf of Mr. Raste.

Mr. Anil Ambani is the chairman of Anil Dhirubhai Ambani Group ( ADAG ), besides being the Chairman of Reliance Capital Ltd ( RCL ) and Reliance Energy Ltd ( REL ). RCL was holding over 1.32 crore shares of REL till 21st May 2007.

On this day RCL sold these shares to a company owned by Mr. Anil Ambani at mere Rs.512.30 per share, even though the directors knew the true value.

Companies run share buy-back schemes, when they think their shares are substantially underpriced in the markets. REL had a buy-back scheme up to a price of Rs.525 per share, during the year 2004-2005. Since then, the profit per share has gone up from Rs.26 per share to Rs.37 per share. Similarly, the book value has gone up from Rs.292per share to Rs.410 per share. These are the two important parameters, which determine the share value/price.

As per the REL price, Rs. 1662.50 on 29th November 07, the shareholders of RCL lost Rs.1,500 crores and Mr. Anil Ambani ( including his family ) gained by the same amount.

This is a very clear case of abuse of shareholder trust by the company chairman and the members of the board of directors. This is also a criminal conspiracy to strip the shareholders off their valuable property. In the days, when the corporates are playing an increasingly important role in our society, it is important that such cases are swiftly and firmly dealt with, to avoid recurrance.

More so, because RCL deals with investor money through Reliance Mutual Fund and Reliance Insurance.


Mr V M Raste
Dated the 30th November, 2007.
12 Maithilee, 34/5 Erandwana, Pune 411004. Phone + 91 20 2543 6648.
email : corporatewatch@hotmail.com

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