The Telegraph
Since 1st March, 1999
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Anil lets watchdog loose on Mukesh

Mumbai, April 26: After a three-month lull, the Ambani guns are blazing again as Mukesh and Anil prepare to confront each other tomorrow in the Reliance Industries boardroom.

Anil Ambani, vice-chairman of Reliance Industries (RIL), has written a letter to watchdog Sebi and the stock exchanges, raising questions about corporate governance at Indian Petrochemicals Ltd (IPCL).

The younger brother, who was vice-chairman of IPCL that Reliance took over, ceases to be on the board after his resignation was belatedly accepted on the quiet and despite, apparently, the fact that he was ready to reconsider.

Yesterday, it was revealed that without his knowledge Reliance Capital had sold its entire holding in a company that owns 46 per cent in IPCL.

Amitabh Jhunjhunwala, an Anil aide who is on the board of Reliance Capital, objected to the sale.

The developments are seen as a setback to efforts to work out a settlement of the so-called 'ownership issues' between the brothers.

In the letter Anil has alleged that he was quietly removed from the IPCL board. The decision was apparently 'noted' at a March 30 meeting without being intimated to the stock exchanges.

Jhunjhunwala had made known his dissent at the Reliance Capital board meeting over the sale of the company's 50 per cent stake in Reliance Petroinvestments, which holds 46 per cent in IPCL. In effect, Reliance Capital has sold 23 per cent of IPCL, valued at around Rs 1,200 crore.

Jhunjhunwala has alleged that the sale resulted in the 'loss of fair value for Reliance Capital Limited of a minimum Rs 1,000 crore'.

He said the transaction was completed in January-March without approval of the Reliance Capital (RCL) board and with no disclosure to stock exchanges and shareholders.

'The transaction in breach of fiduciary responsibilities towards RCL's minority investors could involve substantial regulatory issues,' Jhunjhunwala added.

RIL says Reliance Capital shareholders did not suffer any loss in the transaction.

Sources close to Anil said he wanted the regulators to look into the IPCL board's handling of his resignation and its governance record as well as check if all disclosure norms under the listing agreement were followed.

They said Anil had communicated his offer to reconsider the resignation in a January 27 letter after the board decided at its meeting on January 20 to urge him to review his decision.

However, in a statement last evening, IPCL said Anil's resignation became effective from January 20 when the board took it up.

'The board's request for reconsideration of resignation and the response of Anil Ambani with pre-conditions does not change the fact of his having ceased to be a director from January 20, 2005,' it said.

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