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Mukesh gives up Infocomm sweat equity
BS Corporate Bureau in Mumbai | December 23, 2004 21:52 IST
Last Updated: December 23, 2004 21:55 IST
Reliance Industries chairman and managing director Mukesh D Ambani on Thursday gave up his 12 per cent shareholding in the group's telecom venture Reliance Infocomm, which he received by way of sweat equity.
"There has been a sustained campaign against him on the issue of the acquisition of sweat equity in Reliance Infocomm. Against this backdrop, Mukesh Ambani has sought to renounce the sweat shares," a Reliance Industries spokesperson said.
He also added that Mukesh Ambani's request to annul the shares was accepted by Reliance Communications Infrastructure Ltd, the holding company of Reliance Infocomm.
The spokesperson pointed out that RCIL had, in turn, informed Reliance Industries about the development and that the RIL board would discuss the issue at its meeting at Monday.
A press release issued by the Reliance group also added: "RCIL has been told that the detailed communication sent by the company on this will be placed at the RIL board meeting on December 27."
Reliance Industries vice chairman Anil Ambani had intended to bring these and other Reliance Infocomm issues to the Reliance Industries board and the announcement could be meant to take the wind out of his sails.
But an executive close to Anil Ambani dismissed this, saying: "We have 100 things like this -- we haven't even started."
He also interpreted Mukesh Ambani's move as having been prompted by concerns that official agencies were about to start enquiries on the subject.
Asked to respond to this, the Reliance Industries spokesperson said: "There is nothing illegal in the sweat equity deal. We welcome any investigations.
Mukesh Ambani decided to make a sacrifice for the sake of bigger Infocomm initiatives.
After the annulment of Mukesh's Ambani's stake, the shareholding pattern of Reliance Infocomm will undergo a change. The 12 per cent stake will go back to Reliance Communications Infrastructure, which now holds 65.3 per cent.
Reliance Industries holds 7.6 per cent in Reliance Infocomm and employee stock options account for 7.6 per cent. Mukesh Ambani, however, still holds another 7.6 per cent through companies promoted by his friends and relatives.