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Anil shoots off another letter to RIL board
December 23, 2004 13:25 IST
Last Updated: December 23, 2004 16:18 IST
Mounting pressure on elder brother Mukesh -- Chairman of Reliance Industries Ltd -- ahead of the crucial December 27 RIL board meeting, Anil Ambani has demanded a discussion on changes in Reliance Infocomm equity, charging that the flagship company's board was kept in the dark on this.
In a letter written to all the directors last week as Vice Chairman and Managing Director of RIL, Anil said: "RIL board neither discussed nor approved" the changes in the equity pattern of Reliance Infocomm despite being the largest shareholder.
This is the second letter written by Anil since December 6 raising the issue of Infocomm amid reports that Mukesh Ambani as head of the venture got 12 per cent sweat equity for Rs 50 crore (Rs 500 million) that was valued many times more.
When asked if Anil Ambani's letter would be discussed at the December 27 board meeting, convened for taking up a proposal on buyback of shares from the market, an RIL spokesperson said that "the agenda of the board will be circulated among directors only."
Citing reports on the changes in the equity pattern, Anil said in his latest letter that none of this was ever brought to the consideration of the board.
On its part, a senior Reliance group official was reported as saying that Reliance Infocomm board had decided to offer Mukesh Ambani the right to acquire shares amounting to 12 per cent stake for his contribution to the company.
The price of the 12 per cent stake at that point of time was decided at Rs 50 crore.
In his December 6 letter, Anil Ambani had sought a meeting of the RIL board to discuss the 'recent developments', including its investment of over Rs 12,000 crore (Rs 120 billion) in Reliance Infocomm group of companies.
Acting on the letter of December 6, RIL company secretary Vinod Ambani had written to all the members of the board of directors seeking a suitable date for convening the meeting amid indications that a meeting could be possible only in January.
However, RIL informed the Bombay Stock Exchange on December 20 about holding of the board meeting on December 27 with a single point agenda of buyback of shares.
In his first communication, Anil had also sought a discussion on the resignation of 'our most esteemed' M L Bhakta from RIL board. Bhakta is believed to have withdrawn his resignation, which was tendered within days of the row between Ambani brothers coming into public.
RIL sources said the agenda for the December 27 board meeting would be finalised by Friday-Saturday, but did not say which issues could come up apart from the already declared proposal for the buyback of shares.
Besides, Anil has also sought a discussion on the future of Reliance Energy, a company headed by him, seeking a confirmation of resource support.
The proposed changes in the Articles of Association sought by Reliance Energy to empower Reliance Industries to appoint chairman, vice chairman and directors have, in the meanwhile, evoked strong reaction from the flagship company, chaired by Mukesh.
Hitting back at REL's move, an RIL spokesperson said
that "RIL has not been consulted by REL before the proposed re-amendment of the relevant articles of association. RIL has not sought in an manner the withdrawal of any powers conferred by it to Anil D Ambani."
In a communication to Bombay Stock Exchange on December 21, REL said that as long as the Reliance group of companies and its associates hold over 26 per cent paid-up voting equity shares and are the single largest share-holding group, they shall have the right to appoint majority of directors on the REL board as also the chairman and the vice chairman.
RIL spokesperson said that in March 2004 the Articles of Association of REL were amended, vesting such powers in Anil Ambani, and now the energy venture was seeking to revert to the pre-March position.
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