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Mumbai: The promoters of Reliance Power Ltd on Monday moved a division bench of Bombay high court to stop the Edelweiss Group from selling its pledged shares, after a single-judge bench last week dismissed its petition on the matter.
Four financial institutions had sold the pledged shares of Reliance Group companies in the first week of February, leading to a crash in their share prices. The Reliance Group says the sale, which hammered the market capitalization of its group companies by ₹13,000 crore, was illegal.
“The group (ADAG) has reached an agreement with more than 90% of lenders under which they won’t sell any shares pledged by promoters until September. This is a new development since we have challenged the earlier order. But, here is a case where the lender has sold off shares without even intimating the company. Also, there are some changes we want to make after the order came late last week and hence we are seeking further time to modify our plea," Darius Khambata, senior counsel representing Reliance Power's promoter companies Reliance Project Ventures and Management Pvt. Ltd and Reliance Wind Turbine Insulators, told the division bench.
The division bench of chief justice N.H. Patil and justice N.M. Jamdar allowed Reliance Group a week to add fresh details in its petition and adjourned the matter to 26 February.
The single-judge bench had dismissed the petition last week on the ground that the contract between Reliance Power and Edelweiss required the latter to give a 24-hour notice before the sale and this was given.
Edelweiss Group, IDBI Trusteeship Services Ltd, STCI Finance Ltd, and L&T Finance Ltd had sold the shares of Reliance Communications Ltd, Reliance Capital Ltd, Reliance Power Ltd and Reliance Infrastructure Ltd. The Reliance Group says the exercise of rights to enforce the security is “illegal and excessive and against the process and requirement of the respective borrowings" documentation.
Reliance Group is also claiming damages of ₹2,700 crore from the Edelweiss Group, alleging the malicious dumping of shares of three group companies. However, the single bench is yet to begin the hearing in that case. Vikram Trivedi, managing partner of law firm Manilal Kher Ambalal & Co., along with senior counsels Janak Dwarkadas and Dinyar Madan, are representing Edelweiss Group in the case while Rashmikant & Partners, a law firm, and senior counsel Darius Khambata are representing Reliance Group.