Mumbai, Feb. 6: The Ambani brothers today exchanged threats of legal action over the transfer of shares in the four entities that have been spun off Reliance Industries Ltd.
The Anil camp was the first to fire a broadside by claiming that it had issued a “barrage of legal notices” forcing the Mukesh faction to back off from a fraudulent attempt to stall the transfer of shares.
After the brothers decided to go their separate ways, the four companies were created to facilitate the division by handing them over to Anil.
The Mukesh faction hit back by saying it had received a few letters ' but not legal notices ' and that the shares in the four companies were being transferred to the Anil group. The process would be completed by tonight.
The Anil camp said they had not received any confirmation from the depositories about the transfer. A depository transfers shares from one entity’s account to another’s electronically as stock transactions are now paperless. The accounts, of course, have to be opened with the depository.
Late in the night, the Mukesh side threatened to initiate action against the Anil camp for trying to acquire excess shares by misleading the share registrar and the depository.
The day had begun with the Anil camp issuing a statement on how the Mukesh group had tried to nix an irrevocable power of attorney to enable the transfer of shares in the four new companies ' Reliance Capital Ventures Ltd, Reliance Energy Ventures Ltd, Reliance Natural Resources Ltd and Reliance Communications Ventures Ltd ' to the younger Ambani.
When it approached share registrars JM Morgan Stanley Financial Services Ltd and Karvy last Friday and tried to exercise the power of attorney, it was rebuffed.
Anil claimed the Mukesh faction instructed the depositories to convert the electronic shares into paper stock and hand them over to it.
Stung by the development, the Anil camp dashed off letters to the Mukesh faction, accusing it of taking a “completely fraudulent, illegal and mala fide step of seeking rematerialisation (back to paper form) of the shares”.
It sent similar letters to JM Financial and Karvy, urging them not to “participate in any such fraudulent action”.
It then sent legal notices to the Mukesh faction and all others involved, warning of criminal proceedings if the shares were converted.
The other side hit back with the allegation that two Anil camp members had fraudulently transferred many more shares than authorised by the power of attorney.