Govt. slaps inspection notice on Reliance group

NEW DELHI, SEPT. 4. The Government has slapped an inspection notice under the Companies Act on Reliance Petroleum to probe if the company had diverted about Rs. 700 crores, mopped up through a public offer to family companies for buying the shares of RPL. But the group denied that it had received the notice.

The inspection notice under Sec. 209, issued about two weeks ago, follows the earlier enquiry notices under which RPL's reply was not found satisfactory by the Department of Company Affairs, official sources said.

If proven guilty after the inspection, that could take up to three to four months, the company faces the prospects of getting debarred from entering the capital market, sources indicated.

The enquiry into the allegation of diversion of funds and duplicate balance sheet is pursuent to complaints lodged by the BSP MP, Mr. Rashid Alvi, in April.

In its notices of inquiry issued some time back, the DCA had sought reply from Reliance on various complaints it had received about diversion of funds and subsequently asked for explanation on a few points.

Finding the explanation not satisfactory, the DCA issued the notice on inspection, sources said.

Mr. Alvi had alleged in April that funds collected by the Reliance group through the public offer were diverted to stock markets by promoters and privately held Ambani family companies for personal gains but Reliance had denied the charges.

Mr. Alvi, who released voluminous papers at a press conference in support of his allegations, had subsequently written to the Prime Minister, the Finance Minister, the Reserve Bank of India, the Securities and Exchange Board of India and other authorities demanding a thorough probe while alleging other financial irregularities by the group since 1994.

He had alleged that Reliance Industries (RIL) had collected Rs. 934 crores in March 1994 through a public issue but the promoters and family companies diverted Rs. 789 crores "for playing on the floors of stock exchanges".

Company denies reports

By Our Special Correspondent

MUMBAI, SEPT. 4. Reliance today denied the reports that Reliance Petroleum Ltd (RPL) had not filed copies of its balance sheet for 1994-95 with the Registrar of Companies (RoC) and that the company had filed an alleged backdated version of the balance sheet, after questions were asked in Parliament.

The Reliance spokesperson today termed these allegations as ``baseless, mischievous, factually incorrect and motivated.'' He reaffirmed that copies of RPL's balance sheet for 1994-95 were duly filled with the RoC, within the specified time. It also stated that there were no inaccuracies whatsoever in the copies of the balance sheet filed by RPL with the RoC and all other statutory authorities.

The Reliance spokesperson stated that Reliance has not as yet received any information from the DCA regarding an inspection under Sec. 209 of the Companies Act, 1956. Reliance also stated ``it was unfortunate that baseless allegations of the past were being rehashed and presented in a distorted manner in a section of the media, as part of a deliberate and continuing campaign of disinformation being conducted at the behest of failed and unsuccessful corporate rivals.''

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