Reliance board backs Mukesh as Anil hits out: they want me out

As in earlier instances in the bitter battle for control over the Rs 99,000-crore Reliance Group, the RIL board decided to over-rule Anil’s objections without any discussion and cleared the accounts.

Despite excellent results—47 per cent rise in net profit at Rs 7,572 crore on a turnover of Rs 73,184 crore for 2004-05—the RIL stock fell by 1.48 per cent to Rs 539.10 and was one of the factors in the 61-point fall in the Sensex.

While the developments of the past few days—the acceptance of Anil’s resignation from the IPCL board and the sale of Reliance Capital’s stake in IPCL to two RIL firms—have to be put in the context of both sides striving to secure a better deal in the ongoing settlement talks, the market is still seeking clarity on the intentions of the Ambani brothers.

Meanwhile, RIL upped the ante by asking Satish Seth, vice chairman and a director of Reliance Energy board, to explain why the energy major did not inform RIL about its fiscal 2005 results. The notice was sent to Seth and a response has been sought by Thursday. An REL spokesperson said the accounts were furnished to RIL on the “date of publication of results” ie, April 14.

Earlier, a statement issued on the Reliance letterhead by Anil Ambani’s spokesperson said he didn’t sign the final accounts because of the absence of relevant information on:

• Related party transactions with Reliance Pharamceuticals and Reliance Netraceuticals, two companies to whom Reliance Capital on Monday sold at par its 23 per cent stake in IPCL

• Related party transactions with Infocomm group

• Disposal of plant and machinery of nearly Rs 2,000 cr

• Increase in contingent liabilities by Rs 1,500 crore

• Final accounts of RIL subsidiaries/affiliates/associates

RIL’s response via an unsigned fax: ‘‘Anil Ambani sought additional information through a letter delivered at 1 am this morning, much beyond the official working hours. The board has noted the information request and the response will be provided in due course.’’

Anil also objected to the re-appointment of H S Kohli as executive director. ‘‘Considering Mr Kohli is now over 70 years of age, it would be better to bring in some younger person from within the company…,’’ said the spokesperson. He also objected to Misra’s appointment as new independent director, proposed by Mukesh, Anil said he was opposed it as there was “no prior consultation or discussion”.

RIL responded by saying, ‘‘All other directors approved the re-appointment of H S Kohli and appointment of Ashok Misra. Anil dissented to the reappointment of Kohli and appointment of Misra to the board. The reappointment of H R Meswani was unanimous.’’

The board also turned down Anil’s demand for “immediate termination” of the current buyback offer saying it was “inappropriate”. Anil was not supported on any of the issues raised by him by any other director.