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Reliance group bought 4% L&T stake before sale

Kausik Dutt

Reliance group companies acquired a shade over 4 per cent stake between July 6 and November 18, 2001, prior to sale of its complete 10.05 per cent stake in Larsen & Toubro to the Aditya Birla group company Grasim Industries, according to data filed by L&T with stock exchanges on Tuesday.

The disclosure caused a stir because this was the first time L&T has submitted data on its shareholding pattern after the Reliance-Birla deal and some controversy on how and when the Ambanis acquired the 10.05 per cent stake in L&T.

The Reliance group sold out its entire 10.05 per cent stake in L&T to Grasim on November 18 at Rs 306.60 a share, totalling Rs 7.665 billion. Reliance reportedly made a profit of Rs 3.60 billion on the deal, which ended its 12-year relationship with L&T.

The official L&T communique dated April 8 and signed by the company secretary, said the Reliance group's holding in L&T through three firms - Reliance Industrial & Investment Holdings, Reliance Industries and Reliance Capital - was nearly 5.86 per cent on July 5, 2001, the record date for dividend.

Since the group sold the 10.05 per cent stake in the company in November 2001, it proved the group acquired the shares in between the two dates, market sources said.

A Reliance group spokesperson reiterated that the group's holding in L&T had been around 6 per cent for a long time.

"The L&T disclosure correctly mentioned the Reliance group's holding in the company on some specified dates. But it did not mention what happened between July 5 and November 18, when the company signed the sale deal with the Birla group. So I have no additional comment to offer," he added.

In addition to the Reliance group, the Life Insurance Corporation plunged into a massive acquisition of L&T shares immediately after July 5. LIC scaled up its stake from 13.88 per cent on July 5, 2001, to 17.30 per cent on March 31, 2002.

UTI's holding in the period increased marginally from 10.12 per cent to 11.38 per cent; GIC's increased from 10.12 per cent to 11.38 per cent.

Reliance still has a nominal holding in L&T. The group's combined holding is 8303 shares out of L&T's paid up capital of 24,86,66,346 shares.

Reliance Industrial & Investment Holdings has 350 shares, Reliance Industries has 6,073 shares and Reliance Capital has 1880 shares.

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