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REL seeks RIL view on gas supply

BS Corporate Bureau in Mumbai | December 13, 2004 10:44 IST

In a move that's clearly intended to compel the Reliance Industries board to clarify its intentions towards Reliance Energy, two independent Reliance Energy Ltd board members, former Army chief of staff V P Mallik and energy economist Leena Srivastava, have written to the board of Reliance Industries Ltd seeking its views on the continuance of RIL's five nominees on the REL board till their term expires in 2008.

The RIL nominees are Anil D Ambani, Satish Seth, J P Chalasani, S C Gupta and Amitabh Jhunjhunwala.

The letter dated December 4, 2004, also asks the RIL board about the availability, quantum and price of gas for REL's 3,470 mw Dadri project from the KG-D6 basin, off the coast of Andhra Pradesh.

It also asks about the availability of technical, project and other resources from the Reliance group for implementing REL's growth plans, as for other Reliance group companies.

The letter has the approval of all REL board members.

It notes that although the RIL board approved on January 29, 2004, an investment of Rs 5,000 crore (Rs 50 billion), REL had received so far only Rs 1,500 crore (Rs 15 billion) of this and that the remaining Rs 3,500 crore (Rs 35 billion) is yet to be received.

It also points out that though the letter was sent a week ago, RIL has not acknowledged it. It asks why, and whether the RIL board will be meeting to discuss the letter and what RIL's response to the letter is.

The letter begins by pointing out that Reliance Energy voluntarily invited RIL board members to attend a REL board meeting on October 20, 2004, "recognising the fact that RIL and its affiliates control about 50 per cent of the outstanding capital of Reliance Industries and have invested a sum of Rs 3,200 crore (Rs 32 billion) in strengthening the company to its current position."

It later goes on to state: "The board of Reliance Energy would like to receive the views and confirmation from the RIL board on the continuation of RIL nominees on the REL board as also on other resources available in the future to REL for implementing all its growth plans."

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