The Telegraph
Since 1st March, 1999
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Reliance XI vs Anil Ambani
- Battle on street and in boardroom, blood on bourse
Anil Ambani strode confidently towards the milling crowd of journalists and took the questions thrown at him with aplomb for over five minutes
• On Reliance board committee giving the management clean chit on corporate governance
Anil: Did you really expect anything different to happen' This is a very different type of a cricket game. You’ve got the Reliance XI versus Anil Ambani.
The corporate governance committee did not bother to have a discussion with me while considering the issues that were originally raised by me.
I am in a minority when it comes to issues like corporate governance, transparency as well as rewarding shareholders.

• On his next step
Anil: I know my responsibility to the two million shareholders of Reliance Industries. I’ll continue to serve as vice-chairman and managing director, contrary to the designs of others who do not want me in the company. I was appointed by the body of shareholders.
(Pauses) The shareholders of this company who have stood by us for so many years need to be rewarded. This is their time for reward.
We have great talent in the company.
I have made suggestions in the past which the board has continued to ignore in terms of distribution of treasury stock, issuing bonus shares, increasing the dividend payout ratio.We are in a fundamental upcycle, both in our gas business and in our petrochemicals business. But clearly, I am in the minority as far as rewarding shareholders ... and governance is concerned.

Mumbai, April 27: The white Toyota Land Cruiser Prado swung into Maker Chambers IV two minutes after quarter past 11. Anil Ambani emerged in a regulation white shirt with stripes. Its sleeves were rolled, two folds, not up to the elbows but he was in that mood.

'This is a very different type of a cricket game. You've got the Reliance XI versus Anil Ambani,' he told waiting journalists before going in for the Reliance Industries board meeting.

And the fight went inside.

A Maruti Gypsy of Maharashtra police had tailed him to Maker Chambers because of security threats but was not responsible for law and order beyond that point.

Anil refused to sign the accounts, saying some disclosures had not been made. He objected to the appointment of Ashok Misra, to replace late Ramesh Pai, to the board, pointing out that it had not been discussed earlier. He opposed the reappointment of H.S. Kohli, who is over 70, on grounds that someone younger should be taken in. He sought termination of the share buyback programme.

The result of the Reliance XI versus Anil Ambani battle inside the Reliance headquarters' boardroom was 4-0.

Anil would have known the outcome which might be why he threw some punches before entering.

Those blows landed on the stock price of Reliance despite stunning results for 2004-05.

Elder brother Mukesh entered the building through the exit gate ' as did most of the other directors ' eluding prying eyes, and allowed the company's performance to do the talking on his behalf and answer Anil's questions about the management's corporate governance record.

Reliance reported a 47 per cent growth in net profit to Rs 7,572 crore and rewarded its three million shareholders with a 75 per cent dividend.

It was as though Mukesh was replying to Anil's charge during his chat with the media that his suggestions for rewarding minority shareholders had not been heeded by the board.

'The board should approve a liberal bonus for the benefit of more than two million shareholders of the company, either by free distribution of 12 per cent shares held in the petroleum trust and other companies or by capitalisation of reserves,' Anil said at the board meeting.

Even Reliance Infocomm, which is headed by Mukesh and has been at the centre of allegations from Anil about lack of corporate governance, reported its first profit of Rs 51 crore, against a Rs 390-crore loss in 2003-04.

Still, the Reliance share price lost over Rs 8 from its previous close to end the day at Rs 539.10. Weighed down by the renewed outbreak of the war between the two brothers, the market seemed to ignore the profit surge and the 30 per cent turnover growth to Rs 73,164 crore,

Later, Reliance informed the stock exchanges that 'while all other directors approved and signed the accounts at the meeting of the board of directors, Anil Ambani abstained from voting on the audited financial accounts and has not signed the same'.

If there were any doubts about the settlement effort having come undone, today's developments settled them.

In its communication, Reliance said: 'All other directors approved the re-appointment of H.S. Kohli and appointment of Ashok Misra. Anil Ambani dissented to the reappointment of Kohli and appointment of Misra to the board. The reappointment of H.R. Meswani was unanimous.'

Anil had also waged a battle in the meeting against the share buyback programme that he said should be terminated immediately. He said despite the fact that the programme had been running for three months, the Reliance stock had under-performed the Bombay Stock Exchange sensitive index by 6 per cent since November.

'The company has not seriously pursued the buyback. Despite the fact that out of the 83 days since the buyback being operative, the stock price has remained below the buyback price of Rs 570 per share for 72 days,' he said.

Even before the buyback was approved at a December board meeting, Anil had publicly questioned the move while alleging insider trading.

The programme was pushed through with the objective of stabilising the share price, Anil said. So far only Rs 150 crore of the approved expenditure of Rs 2,990 crore under this head had been used.

Anil was not supported on any of the issues he raised by any other member of the board.

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