New Delhi, Dec 22 (IANS) The letter from the markets watchdog calling for action against Reliance Industries for alleged irregularities in the private placement and buy-back of shares will be looked at seriously, Corporate Affairs Minister Salman Khurshid has said.
The Securities and Exchange Board of India (SEBI) wrote the letter Dec 9 after Justice B.N. Srikrishna ratified its own probe into the matter after a complaint by S. Gurumurthy, convenor of the Swadeshi Jagran Manch.

“SEBI’s letter has to be taken seriously,” Khurshid told reporters here Tuesday on the sidelines of an event to announce some new schemes for minorities, another subject allocated under his portfolio.

“The government doesn’t want to anticipate anything. But if SEBI has taken nine years, give us at least nine days,” Khurshid said. “The regulator will do its work and let me say this, if anybody tries to exert pressure, we will not work under pressure.”

Several members of parliament had also written to the regulator, the registrar of companies and the government on the matter.

“If anybody tries to do a post-mortem by digging old graves, let them. We will focus on the work forward than engage in this post-mortem,” Khurshid said.

The complaint to the markets watchdog pertain to the following two transactions:

-The issue of 187,000 non-convertible debentures (PPD-V) under private placement to the Unit Trust of India in March 1994, convertible into 7,480,000 shares of Rs.10 each at a premium of Rs.391 per share

-Issue of 120,000,000 equity shares at a price of Rs.75 per share in January 2000, allotted on the exercise of option warrants attached with private placement of non-convertible debentures (PPD-IV)

“Hence the shares issued under PPD-IV were at significantly lower prices (Rs.75 per share) as compared to the other issue of equity share (at Rs.401 per share) made around the same time,” said the letter from the markets watchdog.

According to the letter, Justice Srikrishna had said the evidence on record strongly pointed to an elaborate scheme to route the money from Reliance Industries and Reliance Petroleum to the 34 private companies.

This, he said, was to enable them to subscribe to the shares at a lower rate.

“Justice Srikrishna has also opined that the manner in which Reliance Industries has managed to fund the buying of its own securities is really a matter for action by authorities enforcing the provisions of the Companies Act,” the letter said.

“Hence the above matters are being referred to the ministry of corporate affairs for kind consideration and appropriate action.”