Sale of Credit Suisse’s stake in Prime Focus “flagrant abuse of alleged rights”: Reliance Capital

Reliance Capital, headed by Anil Ambani, alleged that the proposed sale of 33.12 percent of the shares of Prime Focus by Credit Suisse (CS) at 44.15 rupees per share “constitutes a flagrant abuse of the rights alleged by CS in under certain loan agreements “with Trust Group Anil Dhirubhai Ambani.

Last week, Credit Suisse signed an agreement with the promoter group of Prime Focus to sell its stake in the company at a price of Rs 44.15 per share, for a total of Rs 463 crore. Credit Suisse will sell 10.5 crore of shares, or 33.12% of the shares, of Prime Focus to the London-based Malhotra family, the promoter of the company. These shares were previously owned by Reliance Mediaworks Financial Services Pvt Ltd of Anil Ambani. The shares were pledged to Credit Suisse.

Expressing concerns over the proposed sale, the debt-laden financial services holding company said the transaction was “tentatively and clandestinely between 2 foreign entities, without any open, fair and transparent process being conducted. to realize the true value of stocks and disregard fundamental conflict of interest norms. ”

“The proposed sale price is a substantial and totally unjustified discount to the intrinsic value of the shares of Prime Focus Ltd,” he said.

On Monday, Prime Focus’s share was listed at Rs 51.80, up 0.78% from the previous closing price of 51.40 on the Bombay Stock Exchange. During the day, the stock hit a 52 week high at Rs 57 apiece.

“The proposed transaction violates several laws, rules and regulations including SEBI (Substantial Acquisition and Takeover), Black Money (Undisclosed Foreign Income and Assets) and Tax Imposition Law. of 2015, the Foreign Exchange Management Act of 1999, and existing RBI guidelines, ”RCAP added.

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The company further stated that it will seek all appropriate legal and regulatory interventions to protect the interests of the lenders and shareholders of PFL and Reliance Capital Ltd.

Prime Focus in an exchange brief on Thursday said its promoter group had reached a deal with Credit Suisse to acquire a 33.12% stake in the company at a price of Rs 44.15 per share.

Naresh Malhotra and his son Namit Malhotra through their companies, ARR Studio Private Limited and A2R Holdings, respectively, will acquire an additional stake in Prime Focus from Credit Suisse through an open offer. Following the closing of this transaction, the promoters’ stake in the company will increase to approximately 70 percent.

Read also: Reliance Capital defaults on HDFC and Axis Bank loans

Prime Focus President Emeritus and Full-Time Director Naresh Malhotra is known for producing Amitabh Bachchan star Shahenshah. His son Namit Malhotra, founder and non-executive director of the company, is the grandson of cinematographer MN Malhotra.

Prime Focus is an integrated multimedia services company that provides end-to-end creative services (stereo 3D conversion and animation), technology products and services (Media ERP Suite and cloud-enabled multimedia services), production services (rental of equipment) and post-production services (Digital Intermediate and picture post) to the media and entertainment industry.

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