| Anil: Clarion call
Mumbai, Jan. 24: Anil Ambani wants the stake of Reliance Industries (RIL) in Reliance Infocomm 'substantially increased' from the current level of 45 per cent so that the group flagship has direct majority and control.
In his 500-page tome on corporate governance made public on Sunday, the vice-chairman and MD of Reliance Industries laments the 'complete lack of transparency in relation to the affairs of Infocomm'.
'To protect RIL from such failures of governance or loss of economic value in future, there is a need for an arms' length shareholders' agreement between RIL and other shareholders of Infocomm group,' Anil said in his note.
Sources say the 500-page dossier contains a suggestion to protect the flagship company from failures of governance. 'The agreement between RIL and other shareholders of Infocomm can deal with issues ranging from preservation of ownership pattern, governance and management, protection of minority shareholders, divestment and avoidance of conflicts,' the note states.
Anil's spokesperson declined comment on the note, which was sent to RIL's corporate governance committee set up after the December 27 board meeting, where the sweat equity for Mukesh ' later annulled 'and other issues related to Reliance Energy were discussed. The panel, headed by independent director Y. P. Trivedi, has D. V. Kapur and M. P. Modi as the other members.
Anil's tome on how Reliance Industries has failed to meet the high standards of corporate governance, transparency and disclosures reached the board days before its January 21 meeting to consider third-quarter numbers.
According to Anil, there is a clear conflict of interest between RIL and Infocomm. These were deepened by what he calls 'related-party transactions of substantial magnitude'. Claiming that these have led to a loss of value for RIL shareholders, he has even alleged that minutes of board committee proceedings on RIL's investments in Infocomm have been 'incorrectly recorded'.
'RIL's investments in and transactions with Infocomm were conducted in a manner detrimental to the interests of shareholders,' Anil argues in his dossier.
The three-member committee was set up after revelations about a web of investment firms picking up equity in Infocomm. Recent disclosures over higher premiums charged from Reliance Industries, while issuing shares at par to some individuals, have also raised a storm.
Sources said the report states that 'the failure is not in keeping with the legacy of RIL's founder chairman, Shri Dhirubhai Ambani, to be world class in all respects'. The report pleads for 'appropriate steps in the interests of the company's over 30 lakh shareholders'.
Trivedi, on his part, has ruled out any wrongdoing in telecom investments. 'The company believes in total transparency. Nothing will be pushed under the carpet,' he had said after the January 21 board meeting. Another director had disclosed that two retired judges had given a clean chit to the telecom investments.
As details of what Anil wrote in his note trickled in, Reliance industries was mopping up two lakh shares for Rs 10.15 crore as part of its buyback. It has, so far, purchased more than 28.69 lakh shares for Rs 149.62 crore. Today, they were bought at an average price of Rs 507.68.