So called Experts & Finance Wizard at Reliance

I always used to wonder why I am able to get so much insight into Reliance and others can’t. I was the first to write a case study on funding malpractices at Reliance Infocomm and how Ambani (Mukesh) is benefiting from infocomm investment at the cost of RIL shareholders. Considering its huge shareholders base and the weightage in the index it should be the most tracked company in the country.

Then I thought maybe experts donot consider Reliance that much relevant now compared to the new economy companies. I thought maybe as other companies are hogging the limelight Reliance is managing to go Scot-free. But that was six month back. Now Reliance is in limelight and maximum newsprint is today being wasted on the “Corporate Governance” issue at Reliance. But these ‘so called experts’ are not even asking the right questions!!

Everybody is repeating the question about the price at which Rs. 1 share were issue to promoters like RIL, Mukesh Ambani, his friends and associates etc. But nobody cared to add up the entire figure given by RIL and questioned and where did you get the rest of the money?? Reliance Infocomm project had an investment in excess of Rs. 20000 crores already and all the figure of equity investment quoted till date (http://www.relianceinfo.com/webapp/Infocomm/jsp/media/PressRelease.jsp?id=114) adds up to only around Rs. 4662 crores. Which means debt equity ratio of the company is higher that 3.29!!! Who will be willing to take that kind of Risk and at what rate of interest??

Again money is being diverted from RIL (at the cost of RIL shareholders) to Reliance Infocomm or Reliance Communication and Infrastructure Ltd. (RCIL) which is the holding company of Reliance Infocomm and subsidiary of RIL. Read my earlier blog (Rs. 17262 crore fraud @ Reliance) for details.

Another question - Check Reliance Infocomm website. In the section of the website where they have mentioned various services offered by the company in services like Broadband etc. they have mentioned that RCIL is the company providing this services. Why RCIL and not Reliance Infocomm, what would be the transfer pricing mechanism. Why RCIL exists in the first place. What must be the intention behind mentioning this on the website below every service that it is being provided by another group company? Do you smell a rat??

Mr. Anil Ambani the financial Wizard of Reliance …why are you not able to lay your hand on this when you are sending out 500 page documents on the issue. Are you really a financial wizard or just a page three personality who has been given the title by the media?

Neeraj Gutgutia
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