Reliance Rights issue- Difficulties to Small investors

TEXT OF LETTER WRITTEN TO SEBI AND MERCHANT BANKERS  OF RELIANCE

The present Rights issue of Reliance has many first to its credit. The biggest Rights issue in the country has come in the most difficult time in the world history, a never heard of event LOCKDOWN. It is completely paperless. The abridged Letter of offer keeps on referring to page nos. of Letter of offer, no such link for which is given in the letter. In spite of the lockdown the entire process has come at a very high speed. Small investors just could not cope with the speed in this lockdown period.  With no newspapers, magazine or postal letters, everything is left to digital world. There is no public transport and no access to cheque books etc.

Many shareholders are likely to miss the deadline for investment. We have been receiving several complaints and grievances from small shareholders.

Please take care of Small shareholders; those who are holding shares valued at less than 2 lakhs as on the record date. The closing date for the issue may be extended. Alternatively a new and unique suggestion may be looked into and implemented. Keeping in mind the objective of putting the funds already collected to good corporate purposes at the earliest, you may allow further time for this segment alone. In essence the scheme for mitigating the difficulties of small investors and senior citizens who cannot move out in the lockdown and are also not tech-savvy, shall work as follows:

1.      Complete the process of allotment against the rights issue as per schedule.

2.      Small shareholders be given preference for allotment of additional shares so that they are not crushed under the financial muscle power of persons with deep pockets.

3.      For allotment of additional shares, the proportionate allotment should start after first allotting 100 shares to all the shareholders who have applied for additional shares.

4.      Small shareholders who could not participate in the rights issue should be given an option to participate and subscribe for their rights up to a further period of 3 months. To enable this, the promoters should give the shares  from their holding, since in any case, the promoters  would have benefited by allotment of additional shares out of such unsubscribed portion.

5.      There are many shareholders who do not have Demat account. They are not  allowed to renounce their holding. This is absurd and robbing them of their valuable property. A female investor complained that she holds the shares in her maiden for which no Demat account was ever opened. She wanted to apply in her married name but is not able to do since she is not allowed to ‘Renounce’ her rights.

You are requested to please take immediate  action to protect the interest of small shareholders and oblige.