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REL empowers RIL to appoint directors
January 18, 2005 11:40 IST
Last Updated: January 18, 2005 16:48 IST
Throwing the ball back in the court of Reliance Industries, Anil Ambani-controlled Reliance Energy on Tuesday succeeded in amending Articles of Association on the appointment of directors after the parent company, chaired by elder brother Mukesh gave up its resistance.
REL informed the stock exchanges of the outcome of postal ballots on a special resolution to amend Articles of Association empowering RIL to appoint majority of directors.
In the midst of the bitter battle between the brothers, when REL had initiated the move last month, RIL had reacted sharply saying that despite holding majority equity it was not consulted on the proposed changes and that there was no need to amend the AoA.
In its communication to the Bombay Stock Exchange on Tuesday, REL said "the altered Article envisages that so long as the Reliance Group of Companies and/or, its associates/affiliates and/or subsidiary companies hold 26 per cent or more of the paid-up voting equity share capital, have the right, inter alia, to appoint majority of the directors on the Board of the company."
With this, REL has reversed the position, obtaining from March 2004, under which RIL had empowered Anil Ambani as chief managing director to appoint the directors.
The latest move to empower RIL to appoint directors in a group company was said to be a tactical move by Anil to seek adherence to similar practices in other group entities, including Reliance Infocomm.
According to REL, empowering RIL to appoint majority of directors, including chairman and managing directors, was in conformity with the company's belief in maintaining the highest standards of corporate governance and transparency.
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