Rpower Shares Down 14% From Recent 52-Week High; Firm Clarifies On SEBI's Order
Date
8/26/2024 6:24:09 AM
(MENAFN- AsiaNet News) Shares of Reliance Power Ltd saw a sharp correction for the second consecutive session in Monday's trade.
The stock struck its lower circuit limit of Rs 32.73 after plunging a further 5%. Its current value is 14.03 percent less than its one-year peak of Rs 38.07, which was reached on Friday of previous week.
The market regulator SEBI barred businessman Anil D. Ambani and 24 other companies, including former senior executives of Reliance Home Finance Ltd., from the securities market for five years due to cash diversion from the firm, which caused a dramatic decline in the share price of RPower.
Anil Ambani was also fined Rs 25 crore by the Securities and Exchange Board of India (SEBI), and he was prohibited from having any involvement in the market for five years, including as a director or Key Managerial Personnel (KMP) in any listed company or intermediary registered with the market regulator.
Regarding the regulator's Reliance Home and other matters, RPower has released an explanation.
"Reliance Power Ltd was not a noticee or party to the proceedings before SEBI in which the Order is passed. No directions are given in the Order against Reliance Power Ltd. Anil Ambani had resigned from the board of directors of Reliance Power Ltd pursuant to the interim order dated February 11, 2022 passed by SEBI in the same proceedings. Therefore, the order dated August 22, 2024 passed by the SEBI has no bearing whatsoever on the business and affairs of Reliance Power Ltd," it stated.
The SEBI, in its 222-page order on Thursday, noted the cavalier approach by the company's management and promoter in approving loans worth hundreds of crores to companies that had little to no assets, cash flow, net worth, or revenue. This suggests a sinister objective behind the 'loans'. The situation becomes even more suspicious when considering that many of these borrowers were closely linked to the promoters of RHFL.
Eventually, most of these borrowers failed to repay their loans, causing RHFL to default on its own debt obligations. This led to the company's resolution under the RBI Framework, leaving its public shareholders in a difficult position.
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