Anil Ambani led Reliance Group has been given no relief by Bombay HC in Edelweiss case. The former had alleged Edelweiss group of misconduct in the sale of its pledged shares. Along with the refusal of relief, the court has described the Reliance Group’s stand; misleading.
This, however, is not the final judgement but the views are “prima facie.”
Justice KR Shriram observed that Reliance Power and its management had tried to mislead the court through a petition that was “smack of deceit.”
The matter relates to the sale of ADAG companies’ pledged shares by Edelweiss Group companies. The latter had subscribed to the ADAG through shares worth Rs 300 crore. However, Edelweiss group sold some of these shares after the Supreme Court held ADAG companies wilful defaulters in Ericsson case. Reliance Group, the plaintiff, approached Bombay High Court seeking a stay on further sale of its shares. In addition, it also sought Rs 274 crore in damage and Rs 2734 crore compensation from Edelweiss group.
According to Reliance ADAG, the unjustified action of L&T Finance and Edelweiss entities led to a fall of Rs 13,000 crore in market capitalisation of Reliance group in just 4 days. It went on to say that as many as 72 lakh institutional and retail stakeholders will bear the loss due to this move. Also, it will harm the interest of all stakeholders.
The blow, however, came when Bombay High Court disposed-off their aggressive claims and suits in the first round of hearing on 23 February 2019. Reliance group’s contention before the court was that they were not given enough time before the sale of its shares. The court was of the view that the plaintiff made a rather strange argument as it had agreed to one business day to be reasonable while inking the contract. It further said that this is an attempt to mislead the court.
No obligations were breached by Edelweiss group in selling the pledged shares, said the court. It asked Reliance group’s counsel Aspi Chinoy as what breach of contract was the plaintiff talking about. Justice KR Shriman quoted: “I find nothing wrong in what defendants did.”
Justice KR Shriman made it clear that it was well within the defendants’ rights to sell the pledged shares. He further said they could not be stopped from doing from what falls under their rights of the applicable law.