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RIL not to buy promoters' shares
December 29, 2004 16:11 IST
Reliance Industries Ltd will not buy shares from promoters or through negotiated deals under the buyback arrangement to allay fears of insider trading.
"The RIL board confirmed that the company shall not purchase shares under the buyback from the promoters or from any person in control through negotiated deals or private arrangement and that funds borrowed from banks or FIs will not be used for the buyback," RIL said in a communication to the Bombay Stock Exchange.
RIL board has already approved buyback of shares at Rs 570 a share and made a provision of Rs 2999 crore (Rs 29.99 billion) for this.
The buyback would be made out of the free reserves and/or the securities premium account of the company by open market purchases through stock exchanges as per Securities and Exchange Board of India regulations, RIL said.
RIL's buyback arrangement is part of strategy to give a boost to its scrip price with higher earnings per share as the number of outstanding equity shares will get reduced.
The RIL board, where RIL vice-chairman and managing director Anil Ambani abstained from voting, approved the buyback of its fully paid-up equity shares of Rs 10 each at Rs 570 per share.
Meanwhile, RIL has informed the BSE that it has invested in deep discount bonds and the board has noted other dues of Reliance Communications and Infrastructure Ltd and Reliance Infocomm Ltdhave been fully paid.RIL has also reaffirmed that gas would be supplied for the Dhirubhai Ambani Energy City power project.