Bombay High Court clears RIL demerger
09 December 2005
Mumbai: Justice Nishita Mhatre of the Bombay High Court has allowed the scheme of arrangement for the de-merger of Reliance Industries Ltd. The court also rejected a plea for a stay on the order filed in November by a Reliance shareholder, who had levelled charges of non-disclosure of the assets of Reliance Energy, Reliance Capital and Reliance Infocomm, aggregating Rs 19,119.54 crore being demerged to issues of corporate governance .
Justice Mhatre's order clears the final hurdle for giving shape to the arrangement worked out by Mukesh Ambani and his younger brother Anil Ambani to split the group companies' shareholdings, that gives each individual control over their respective companies. "Whatever scheme they filed has been approved," Justice Nishita Mhatre said.
Under the plan, younger brother Anil Ambani will gain control over Reliance Energy and Reliance Capital, as well as the unlisted Reliance Infocomm. Elder brother Mukesh Ambani will run the flagship business Reliance Industries and IPCL.
The scheme was approved by the shareholders on October 21 at a meeting chaired by Justice M L Pendse, who had been appointed by the High Court for this purpose.
However, the final formal separation will still take two or three months, as Reliance Industries will have to first lodge the court order with the Registrar of Companies for effecting the de-merger and, then, requisition a meeting of its board to fix the record date for re-listing the new RIL shares.
The shares of Mukesh Ambani's Reliance Industries moved 2 per cent higher on the news of the court to a high of Rs863.80, Anil Ambani's Reliance Energy moved up 1.8 per cent to Rs643 and Reliance Capital by 2 per cent to Rs463.