“There have been concerted efforts to destabilize the markets and the investor sentiments,” Doshi said, adding that rumour-mongering by unscrupulous elements have contributed to the sharp fall in the group stocks. “In the past two weeks, this illegal bear cartel has destroyed market value of over Rs 3 lakh crore in the infrastructure sector,” he added.

Doshi said the group intends to take strong legal action against those behind the spread of the rumours, as well as those making irresponsible statements about the group. Doshi also said the group companies, Reliance Infra and RNRL, as well as their statutory auditors, have not received any notice from auditing regulator ICAI with regard to the consent settlement reached by the two companies with Sebi.

The group stocks, however, today bounced back, defying the overall bearish sentiment in the broader market and surged by up to 11 per cent in early trade. Reliance Infrastructure, which shed 25.14 per cent  in yesterday’s session, shot up by 10.97 per cent this morning. Another major gainer from the Anil Ambani camp was Reliance Communications, which advanced by 7.22 per cent to an early peak of Rs 101.70, after hitting a record low of Rs 90.80 yesterday.

Following the debacle on the bourses yesterday, the Anil Ambani Group had issued a statement after the markets closed, alleging, “a series of completely baseless and motivated rumours have been spread today by our unscrupulous corporate rivals.” “This (rumour-mongering by rivals) has been accompanied by vicious and illegal bear-hammering of our listed stocks to create panic and destabilise the markets,” the group had said.

“We have made a formal complaint to SEBI and the stock exchanges to immediately investigate these illegal trades and take appropriate action to safeguard the interests of our over 11 million investors,” it added. Shares of Reliance Broadcast Network also went up by 5.37 per cent, while Reliance Capital jumped by 10.51 per cent, Reliance MediaWorks by 9.31 per cent and Reliance Power by 5.3 per cent today.
Agencies

The companies, part of the Anil Dhirubhai Ambani Group, and their top executives have also agreed to abide by conditions set out by Sebi, four persons with knowledge of the development told ET.

The move will remove a persistent source of uncertainty that has dogged the companies for years. “The move is positive for Reliance Infra because the company will be able to access the capital markets without this shadow of regulatory uncertainty.

The company could have litigated all the way to the Supreme Court but that could have dragged on for years and simply made no sense,” said one of the four people. RNRL is in the process of being merged into Reliance Power , another ADAG company. So the proposed settlement is not particularly consequential for it.

These conditions are mainly pledges to tighten internal processes and are not particularly onerous, the people said. They are a standard part of any consent agreement. The settlement, which will involve a total payment of close to Rs 50 crore by the two companies, is close to being concluded after the consent terms were accepted by a three-member internal Sebi committee headed by retired Mumbai High Court judge Hosbet Suresh.

The panel’s conclusions are likely to be endorsed by two whole-time members of the Sebi board, three of the four persons mentioned earlier said. The ruling of the two board members is final.

ADAG officials declined comment for the story. Reliance Infrastructure, which distributes electricity in the suburbs of Mumbai and in parts of Delhi , is one of the flagship companies of the Anil Ambani Group . It also owns close to 45% of Reliance Power, which is implementing 25,000 mw of projects.

If the final figure endorsed by the regulator is close to Rs 50 crore, it will be among the highest fees to be paid since it was introduced in 2007. These negotiated settlements are common in the US where the Securities & Exchange Commission, or SEC , approves a large number of consent orders every year.

In India , a firm or person facing a probe can submit an application seeking a consent order, without admission of guilt and without denial of liability. Sebi has the right to refuse to enter into consent proceedings if the violations are be particularly egregious.

If the regulator agrees, the entity facing the probe has to finalise the terms with Sebi officials. These terms then go through a two-stage vetting.

First, they have to be endorsed by a panel headed by a retired high court judge, currently Hosbet Suresh. The panel’s conclusion then has to be endorsed by two full-time members of the Sebi board. Full-time members are officials in charge of executive functions as distinct from part-time board members.

Complex Case

At the heart of this case is a show-cause notice issued on June 7, 2010, by Sebi to the two companies and their top executives.

The notice came in the wake of a probe by the regulator and government agencies into dealings of Pluri Emerging Companies, an obscure foreign portfolio investor, which purchased participatory notes with stocks such as RNRL and Reliance Infrastructure as the underlying.

Participatory notes are derivative instruments that allow offshore entities to trade in Indian stocks anonymously.

Pluri had bought the participatory notes from Hythe Securities, another FII , which in turn had bought them from Barclays Bank , a British bank.

At that point, the Enforcement Directorate was probing Pluri for a series of allegedly fraudulent transactions involving the siphoning off of funds from the accounts of two Anil Ambani-promoted firms in the London branch of UBS and the use of these funds to buy shares in India. The proceeds of foreign loans raised by the ADAG firms were parked in these accounts.

East North Interconnection Company Limited, a wholly-owned subsidiary of Sterlite Technologies Limited today announced that it has arranged  of  Rs 700 crore debt for its Ultra Mega Power Transmission Project (UMTP) awarded to the company, last year, a company statement said adding that SBI Caps was the sole arranger for the debt.

The East-North interconnection mega transmission project aims to evacuate power from the North-East and Eastern states to the Northern region of India is the first mega independent power transmission project to be awarded in India.

The project involves establishment of two 400 KV Double Circuit transmission lines that would respectively connect Assam with West Bengal and Bihar   The project has been awarded on a ‘Build, Own, Operate and Maintain’ (BOOM) basis for 22 years which quoted lowest tariff for the project.

East-North Interconnection Company Limited (ENICL) was a special purpose vehicle (SPV) created for the East-North interconnection mega transmission project by the Power Finance Corporation (PFC), which was nodal agency for the project.. On March 31, 2010, STL completed the process of 100 per cent acquisition of ENICL from PFC.

The other two projects under UMTP scheme floated by the power ministry to augment country’s transmission capacity have been bagged by the Anil Dhirubhai Ambani Group (ADAG) company R-Infra.

The total cost for the expansion is estimated at Rs.10,000 crore.  R-Power’s partnership with GE and deals with other American firms would result in over US $2 billion of manufacturing exports from US to India over the next two years, said the ADAG firm.

On this occasion, Obama said the deals barely scratched the business potential between the two countries and dubbed India as the market of the future, with Washington willing to step up investments in the country.

“This is defining moment in Indo-US energy cooperation,” ADAG Chairman Anil Ambani said after signing the deal with GE Chairman Jeff Immelt.

The company is targetting an operational capacity of 5,000 Mw by 2012 and will commission another 20,000 Mw over the next three years, Ambani announced at the  company’s annual general meeting (AGM).

Further, he said, it will look at achieving 25,000 Mw capacity by 2015, 3,000 Mw of hydro capacity by 2016 and 1,000 Mw in green power, consisting wind and solar, over the next five years.
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Ambani said the company has domestic mines holding over two billion tonnes of coal reserves that can support up to 20,000 Mw of electricity generation capacity. Rower’s Indonesian mines can support another 10,000 Mw of capacity.

The firm’s coal bed methane (CBM) blocks have enough gas reserves for 2000 Mw of power generation capacity, he said.
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Post Supreme Court judgement on ADAG’s gas supply dispute with Mukesh Ambani-run Reliance Industries, R-Power has commenced the development of 10,000 Mw of gas-based generation, he said, adding construction has started for the 2,400 MW gas-based plant at Samalkot in Andhra Pradesh.
The project, which will cost Rs 10,000 crore and is expected to be completed by 2012, he said.

It recommended allocation of 8 mmscmd gas for the 2,400 MW expansion project planned by R-Power at Samalkot, saying the project had environmental clearance besides “land, water and all other infrastructure facilities.” Also, it has executed EPC contract on July 21, 2010.

The ministry sought 4.48 mmscmd gas for the 1,200 MW project Torrent Power is setting up at Dahej SEZ in Gujarat, 0.4 mmscmd for 100 MW unit of Pandurang Energy Systems at West Godavari District in Andhra Pradesh and 1.62 mmscmd for 436 MW plant of RVK Energy at East Godavari District, also in Andhra Pradesh.

All the four projects, according to the power ministry, would be commissioned during the current XIth Five Year Plan period (2007 to 2012).

Sources said the EGoM did not make any allocation to any plant as RIL had informed that it cannot produce more than 60 mmscmd gas from KG-D6. All of the current output of 60 mmscmd from KG-D6 has already been allocated to urea manufacturing units, power plants, LPG units, city gas projects, steel plants and refineries.

More gas from KG-D6 would flow when RIL completes drilling additional wells in the eastern offshore field.

The project is financed on a debt-to-equity ratio of 75:25 and a consortium of 15 banks and financial institutions participated in the financing arrangements. The consortium includes Rural Electrification Corporation, Life Insurance Corporation, UCO Bank, Union Bank, Andhra Bank, Corporation Bank, Punjab National Bank, Indian Overseas Bank, Andhra Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, Vijaya Bank, Punjab and Sind Bank, Yes Bank and Indian Bank.

IDBI Bank is the lead arranger for the debt facility with Power Finance Corporation acting as joint lead arranger.

The coastal power project Krishnapatnam UMPP is based on imported coal, located in Andhra Pradesh is also the largest power project in South India which is in the implementation stage. The project will supply power at a competitive levelised tariff of Rs 2.33 per unit, to the four states. It will supply 1,600 Mw to Andhra Pradesh, 800 Mw to Maharashtra, 800 Mw to Tamil Nadu, 800 Mw to Karnataka. Reliance won the project in November 2007 in a competitive bid process conducted by the central government. 

“With the financial closure for the Krishnapatnam UMPP, we have completed the financing arrangements for two UMPPs awarded to us by the government and have secured funding for a capacity of 10,000 Mw. The Krishnapatnam financing is an important milestone as we undertake the implementation of our power project portfolio of over 37,000 Mw,” said J P Chalasani, CEO of Reliance Power. Reliance has achieved financial closure of Sasan UMPP in April last year.

The company has short listed Bharuch and Dahej as possible locations for the proposed plant. The move, of course, does not mean the group is giving up on its proposed 7,800 Mw power project at Dadri in Uttar Pradesh, which is facing problems related to land acquisition. In fact, R-Power had been looking for alternative locations earlier, in case the Dadri plant did not materialise.

It has had talks with Maharashtra, Gujarat and Andhra Pradesh governments on the issue. The east-west gas pipeline – which is being built by the Mukesh Ambani-led Reliance Industries from Kakinada to the west coast – will run through these three states.

R-Power is also building a 1,400-Mw, gas-powered plant in Sambalpur Orissa, where there is scope to expand capacity because additional land is available. The process of getting approvals for the expansion is in an advanced stage. Besides, the company is also setting up another 4,000 Mw, gas-based power plant in Shahpur, Maharashtra. It has received bids for equipment supply and construction. Environmental clearances and land acquisition are also being worked out. Overall, R-Power is implementing power projects with an aggregate capacity in excess of 35,000 Mw.

So, for anyone wanting natural gas for their plants, be it in fertilizer, power or any other sector, the allocation is to be made (to them) closer to the time when they can actually consume that gas,” he said. Incidentally, RIL chairman Mukesh Ambani during the company’s AGM told shareholders that his firm will supply gas to ADAG plants as and when they are ready and it is subject to the allocation being made by the government. 

However industry experts feel, issues like, tenure of the contract, quantity,  take-off point for the gas,  conditionalities regarding take or pay clause etc will actually determine, whether two brothers reach to an agreement or not. Although deadline given by the apex court to both brothers to reach an agreement has got over on Monday, they still have eight weeks to conclude negotiations and sign the  agreement.                                                                                       Agencies