Shares of Reliance Infrastructure were locked in the 5% lower circuit on Wednesday, August 13, despite a favourable verdict by an arbitral tribunal for the company worth ₹526 crore.
Reliance Infrastructure said it secured an arbitration award against Aravali Power Company Private Limited (APCPL). The dispute arose from the alleged wrongful termination of a contract by APCPL in 2018, which the Anil Dhirubhai Ambani group (ADAG) company contested through arbitration proceedings.
The Arbitral Tribunal, by a majority decision, has now ruled that the termination of the contract was invalid. In line with this ruling, the Tribunal has awarded consequential claims of ~ ₹526 crore in favour of Reliance Infrastructure.
“A three-member Arbitral Tribunal, by a majority award, has held that the termination by APCPL was illegal, invalid, and wrongful, and partly allowed the Company’s claims towards damages and costs incurred due to the wrongful termination. The award in favour of the Company is for a sum of ₹526.23 crore, along with interest,” the company said in a filing.
The proceeds from the award will be used by Reliance Infrastructure to further strengthen its financial position and for growth purposes.
Why is Reliance Infrastructure share price falling?
Reliance Infrastructure share price tanked for the second day in a row, taking the overall losses in the month of August to nearly 22%.
The ADAG stock remains under pressure after SEBI, on Tuesday, turned down a settlement proposal from industrialist Anil Ambani regarding charges linked to investments in YES Bank, placing him at risk of a $208.40 million penalty, according to a Reuters report.
Last month, ED had searched locations linked to the group as part of a scheme to siphon off ₹3,000 crore in loans from YES Bank, Reuters reported.
A proposal by Anil Ambani, his son Jai Anmol Ambani, and former Yes Bank chief executive Rana Kapoor to settle has not been accepted. SEBI has informed Ambani and his son that it will pass directions asking them to compensate the investors, documents showed. Additional action could include monetary penalties, Reuters said.
Relinace Infrastructure share price was locked at ₹257.55, its 5% lower price band.
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