India regulator dimisses Rel. Power IPO complaint

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MUMBAI, Dec 28 (Reuters) - India's market regulator said it has disposed of a complaint against a planned initial public offering by Reliance Power Ltd, clearing the way for final approval what could be the country's biggest-ever listing.

Parent Anil Dhirubhai Ambani Group (ADAG) has said the IPO entailed a sale of a 10.1 percent stake in Reliance Power, which media reports have said could raise up to $2.8 billion.

Late on Thursday, the Securities and Exchange Board of India (SEBI) directed ADAG's entire holding in Reliance Power, 20 percent of the capital, be locked-in for five years from the date of allotment, rather than the 18.6 percent proposed by the company.

SEBI also said in a statement it had no jurisdiction to decide or take action on allegations the IPO would affect the interests of shareholders in Reliance Energy Ltd RLEN.BO, an ADAG company which owns 50 percent of Reliance Power.

"Now that the allegations have been found to be baseless, we expect SEBI approval for the IPO will take the normal course," a source familiar with the matter said.

A lawsuit filed in the Mumbai High Court by an independent organisation in October had claimed a "serious breach of corporate governance" in the IPO, SEBI said.

The complainant said Reliance Energy shareholders would be adversely affected by the IPO because several major projects had been transferred to Reliance Power from Reliance Energy, SEBI said.

Reliance Power maintained its activities were "in accordance with law", SEBI said.