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regular-article-logo Thursday, 18 July 2024

Mukesh Ambani sets succession plan in motion, appoints Isha, Akash and Anant on Reliance board

Wife Nita Ambani to step down

PTI Mumbai Published 28.08.23, 02:35 PM

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Billionaire Mukesh Ambani's children -- Isha, Akash and Anant, on Monday were appointed on the board of his energy-to-technology conglomerate Reliance Industries Ltd, in what is seen as a clear path of succession planning at India's most valuable company.

The board of Reliance met ahead of the company's annual general meeting to approve the appointment of twins Isha and Akash as well as Anant, as the "non-executive directors of the company," the firm said in a stock exchange filing.

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In a statement issued by the company said,"The Board of Directors of RIL, at its meeting on Monday, on the recommendation of the Human Resources, Nomination and Remuneration Committee, considered and recommended to the shareholders for approval of appointment of Isha Ambani, Akash Ambani and Anant Ambani as Non-Executive Directors of the Company. Their appointment will take effect from the date they assume office after approval by the shareholders."

The Board of Directors also accepted the resignation of Nita Ambani from the Board respecting her decision to devote her energies and time to guide and enable Reliance Foundation to make even greater impact for India.

The Board of Directors appreciated Nita Ambani for her leadership of Reliance Foundation as its Founder Chairperson. Over the years, RF has made considerable progress in its mission of nurturing and empowering marginalised and under-resourced communities in India. They lauded Nita Ambani’s request to focus even more on strengthening Reliance Foundation as it embarks on a mission to achieve even greater societal transformation by undertaking a host of new programmes and initiatives.

As the Chairperson of Reliance Foundation, Nita Ambani will attend all the RIL Board meetings as a permanent invitee to the Board so that the Company can continue to benefit from her advice.

Last year, the 66-year-old tycoon had made way for his first-born Akash Ambani to become the chairman of India's largest mobile firm, Reliance Jio Infocomm Ltd.

Ambani, however, continued to be the chairman of Jio Platforms, the firm that holds Reliance Jio Infocomm.

US Ivy League university-educated Ambani scions have in the last few years been groomed for leadership positions at Reliance's three units -- oil to chemicals, telecoms and retail.

While retail and digital services are housed in separate wholly-owned subsidiaries, the oil-to-chemical or O2C business is a functional division of Reliance. The new energy business is also with the parent firm.

The three businesses are almost equal in size.

While Akash and Isha, who is married to Anand Piramal (son of Piramal Group's Ajay and Swati Piramal), have been both active in the group's new-age businesses of retail and telecom, Anant has been involved in the renewable energy and oil and chemical units of Reliance as a director.

Akash's twin sister, Isha, 31, was identified for Reliance's retail arm and the youngest sibling Anant for new energy business.

The announcement is a clear sign that Mukesh, who was embroiled in a bitter inheritance dispute with his younger brother after their father Dhirubhai died in 2002 without a will, is preparing to handover the baton to his children in the future.

Mukesh and his brother Anil fought a bitter battle for control of Reliance Industries. After a protracted public spat, their mother brokered the split in 2005; Mukesh took oil and petrochemicals, while Anil got telecommunications, power, and financial business among other units.

But their fortunes diverged - while Mukesh rose to become the richest Asian, Anil pleaded "zero" net worth to a London court in 2020.

The brothers, however, seemed to have reached a detente in recent years: in 2019 Mukesh helped Anil to make a USD 77 million payment that allowed him to escape jail.

Mukesh re-entered the telecom business and now also has a financial business unit.

While Akash and Isha graduated from Brown and Yale respectively, Mukesh dropped out of Stanford to build a petrochemical factory for his father.

He turned his textiles-to-petrochemicals business into India's most powerful conglomerate. Reliance's Jamnagar refinery is now the world's biggest single-site integrated refinery complex, Jio is the largest telecom firm with 450 million subscribers and its retail business is the biggest network of shops.

Akash and Isha have been on the boards of Reliance Retail Ventures Ltd -- the company that operates supermarkets offering consumer electronics, food and grocery, fashion, jewellery, footwear, and clothing, as well as the online retail venture, JioMart - and digital arm Jio Platforms Ltd (JPL) since October 2014.

Anant, 27, has recently been inducted as a director on RRVL. He has been a director on JPL since May 2020.

Mukesh first spoke of a succession plan at Reliance Family Day, which marks the birth anniversary of the group's founder Dhirubhai Ambani, on December 28, 2021. Reliance, he had said, is "now in the process of effecting a momentous leadership transition." Prior to that, at the company's annual general meeting (AGM) in June 2021, he had indicated that his children would now find a prominent place in the family's vast empire.

He had said: "I have no doubt whatsoever that the next generation of leaders at Reliance, led by Isha, Akash and Anant, will further enrich this precious legacy." Last year, Akash was appointed chairman of Jio Infocomm.

The succession plan comes at a time when Reliance is in the middle of a very expensive switch to clean fuels by investing across the entire value chain of solar, batteries and hydrogen.

Just as steady cash flows from oil refining and petrochemicals made it possible for Reliance to incubate telecom from scratch, profits from digital businesses and retail may allow it to replace hydrocarbons -- the conglomerate's traditional source of wealth -- with green energy over the next decade.

Dhirajlal Hirachand Ambani, also known as Dhirubhai Ambani, founded Reliance in 1973. He led the family business expansion from textile to oil to telecom but the family plunged into chaos after his sudden death in 2002.

Since 2019, Mukesh Ambani has been slowly overhauling the top-heavy hierarchy at Reliance to improve governance in line with global standards. He sold a 32.97 per cent stake in Jio Platforms to the likes of Google, Facebook and other venture capitals and got a clutch of foreign investors in the retail venture.

In Reliance's new structure, different business verticals will be run like independent businesses. There will be no interdependencies between group companies for raising capital or debt servicing. The Ambani family is also consolidating its ownership in the company.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.

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