The chinks in the armour of India's once most powerful corporate are getting bigger. The latest skeleton to tumble out of the group's closet and embarrass the elder Ambani scion, Mukesh, is the revelation that three companies-Fairever Traders, Prerna Auto and Softnet Consultants-to which Reliance Infocomm had allotted 10 million shares at Re 1 apiece, were allegedly linked to former telecom minister Pramod Mahajan. When the controversy broke, Reliance issued a statement that sought to clarify its position. It admitted that it had given some equity to the three nominee companies of Ashish Deora (who was linked to Mahajan) as a "nominal compensation" for helping the company in obtaining "in-building permissions and associated Right-of-way permissions". However, since "Deora was not able to fulfil his commitments... the shares were returned to the trust," the statement concluded, naming neither the three companies nor the dates of the share transactions. Mahajan, however, has admitted that his son-in-law Anand Rao works with India Online, a company co-promoted by Deora. In November, Reliance had done another volte-face when Mukesh Ambani had to give back the 12 per cent sweat equity (now worth some Rs 5,000 crore) when it transpired that he had been issued the shares at a face value of Re 1 against Rs 250, which parent Reliance Industries was made to pay (Reliance Infocomm subsequently denied this). But the moot question is, does undoing its follies absolve Reliance of its guilt? It may be too much to expect an answer from the regulators.
Source: BT
Source: BT
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