Anil Ambani threatened with class action suit at AGM

Anil Ambani
Reliance Group Chairman Anil Ambani addresses a meeting in Mumbai. Photo: IANS

Mumbai: Massive erosion of wealth due to poor performance leading to frequent rating downgrades has forced irate shareholders of the Anil Ambani Group companies to complain against the management, even threaten to file a class action suit.

A shareholder, who is a corporate lawyer from the city, said he has lost over 90 per cent of the value of over Rs 3 crore investment in three of the seven Reliance Group companies.

He was particularly peeved at group chairman Anil Ambani pledging over 80 per cent of his holdings in the company, blaming him for bad signalling.

The shareholder said he will marshal 10 per cent shareholders to launch the country's maiden class action suit, in which a group of complainants sues a defendant or a number of defendants on behalf of a group, or class, of absent parties.

The Companies Act 2013 has a section that enables interested parties to file class action suits. But so far no case has been filed under this provision. In the West, it is a common practice.

It can be noted that as of Monday, the seven publicly traded Anil Ambani Group companies had a combined market value of a paltry Rs 18,525.62 crore, of which close to Rs 16,000 crore are of Reliance Nippon AMC alone.

The once-flagship Reliance Communications is the worst of all and at NCLT and closed down 1.28 per cent to a paltry Rs 0.77 apiece with a m-cap of Rs 212.94 crore. Its 52-week high was Rs 18.60.

Another one-time flagship Reliance Power, which had a dream-run with its mega IPO that was oversubscribed 72 times in February 2008, raising a whopping Rs 11,563 crore, today is the drag on the name of the group. Its m-cap stood a low Rs 617.12 crore on a share value of Rs 2.20, after plunging 8.71 per cent on the BSE against a 52-week high of Rs 32.65.

Similarly, Rinfra, Reliance Capital, Reliance Nippon Life AMC, too shed points.

In his reply to the shareholders, Ambani said, "we will look at all the suggestions made and the issues raised we will deeply think about the issues and will do our best to address some of them," Ambani added.

The Reliance Power AGM was third along the six AGMs held by group companies on Monday. Even though the fortunes at the bourses of the first two companies--Reliance Capital and Reliance Infra--are not so good, no shareholder voiced any particular concerns at those AGMs.

Distraught shareholders also raised concerns in the RCom's AGM, and sought clarity from the resolution professional who was chairing the meeting.

(With inputs from PTI)

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