The issue of three free shares for every five RPower shares held compensates investors only if the bonus shares are given to the original IPO allottees of RPower, said a section of market players. If I have been allotted shares at Rs 430 in the IPO and I have sold them off at Rs 350 to somehow pay back my creditors, the bonus issue of shares is not going to compensate me, but the person who bought from me at Rs 350. Whereas it is I who took the risk and deserves to be compensated, said Mr Arun Kejriwal of Kejriwal Research and Information Services. So the record date is important.
Of course, RPower is not obliged to make a bonus offer by law, but if it wants its bonus offer to be considered compensatory in spirit, then it can use as a precedent, an order of the Supreme Court in the Bausch & Lomb case, said an official who deals with legal matters at a leading brokerage. The court directed Italy-based Luxottica, which acquired Bausch & Lomb overseas and, consequently 44 per cent in B&Ls Indian business (currently Rayban), to make an open offer to the Indian shareholders. Interestingly, the court also asked Luxottica to include in the offer price an interest rate of 10 per cent per annum calculated from the date the open offer got triggered. This interest would be applicable to only those shareholders who both held shares on the date when the open offer was triggered and continued to hold the shares on the closure date of the public offer, said the court. Of course, there were very few investors who actually held shares for those five or seven years. But for RPower, a parallel move would be to offer the bonus shares only to IPO allottees and among them, to those who also continue to hold the shares till the record date, said the legal expert. There is also the question of whether Mr Anil Ambanis voluntary contribution of 2.6 per cent of his shareholding to Reliance Energy would lead to a tax liability for REL. If it is a gift (which is how Mr Anil Ambani referred to it once at the news conference), then would it fetch gift tax, since Mr Ambani is not a blood relative of Reliance Energy? Gifts of more than Rs 30,000 made by persons who are not blood relatives fetch tax at 30 per cent. It is too early to tell yet what the interpretation might be, said a tax consultant.