|
Flashback over: Now, six
directors of REL have resigned en masse: Satish
Seth, KH Mankad, SC Gupta, JP Chalasani, Amitabh
Jhunjhunwala, and Prof J Ramachandran. None of the
directors cited any reason for the sudden
resignation. Reliance Energy stock plummeted 6%.
This marks a turning
point in terms of "media coverage" of the slit
story. It is from here that the media started
getting its daily "feeds" from unknown sources.
Newspapers and news agencies started getting
copies of documents and email messages which were
sent inside the Reliance companies. The director’s
resignation triggered intense speculation: have
they resigned at Anil Ambani's instance to put
pressure on Mukesh? Were they asked to resign by
Mukesh who wanted to cleanse the REL board of
Anil's friends? There are no answers.
The same day they
resigned, newspapers received faxed copies of a
letter written by Anil Ambani to his elder brother
Mukesh regarding a particularly interesting RIL
board meeting which happened on July 27, 2004.
Let's take a closer look.
If the letter,
purportedly written by Anil Ambani is to be
believed, the board meet passed a resolution,
under Item no 17 on the meeting agenda which
shifted the power equations within the Reliance
board. The Anil Ambani letter complains that such
a significant item was smuggled inside an
innocuous looking sub-section under the title of
setting up a health and safety committee, whereas
the contents included changing the authorities of
the vice-chairman and managing director. The
letter says that the item was passed without
discussion and despite several protest messages
from Anil Ambani to his brother, the elder brother
did not bother to listen. It also says that Anil
tried to get other directors on the board to talk
to Mukesh several times in this regard, but the
answer from the CMD's office was that there was to
be no alteration on the resolution.
Is this letter genuine?
We don't know. There has been no denial from Anil
Ambani or Mukesh Ambani about the veracity of the
letter.
Sunday, November 28 saw
an email from Anil Ambani going to the employees
of his company Reliance Energy, basically to calm
the uncertainties and the set the record straight.
He said that he had asked the six directors to
stay on as members on the board. The mail made no
mention of Mukesh Ambani. In the letter, Anil said
that he had no personal stakeholding in REL, but
was working as a professional nominated by
Reliance Industries to REL. Another letter
followed on Monday, this time to RIL staff, where
he sought support for himself and Mukesh and said
that he and Mukesh were co-creators of the
Reliance Empire.
Is it a little too early
to say that a split is inevitable? The
semi-informed comments in the media do not add up
to much. We know for a fact that Anil Ambani did
not attend the inauguration of Mukesh Ambani's
dream project Reliance Infocomm in 2002. That does
not mean much. It is said that Anil's political
ambitions and entry into Rajya Sabha was reason
for the discord between the two. Some other
reports say that REL's aggressive investment plans
for Uttar Pradesh cheesed of RIL and Mukesh.
Reliance Infocomm is run almost single-handedly by
Mukesh Ambani, and Anil Ambani keeps miles away
from it. So is Reliance Infocomm the cause for
trouble? Reliance is believed to have sunk in Rs
25,000 crore to nurture the Infocomm dream. At the
last Reliance Industries quarterly results
announcement, Anil Ambani had said that there will
be no more such RIL investments for Reliance
Infocomm.
Split or no split,
certain things are clear: One; the reputation of
Reliance Industries has definitely gone down in
the eyes of the general public and the Reliance
shareholders and investors. Two: It is time for
someone to wield the corporate governance lens. If
a critical agenda item is squeezed inside a
"health and safety committee" note and the same
passed without discussion - as has been alleged
-and the vice-chairman & MD protests to no avail,
it means that all is not well. Three: It is time
to find out who sold Reliance shares in the days
preceding Mukesh's "ownership issue" comment. Did
someone in the know quietly make money with inside
information? Four: There are "long hours and long
days ahead", as Anil Ambani said in one of the
earlier days following the ownership flare-up.
DWS
stops short of calling this ongoing story a
"sibling warfare" or "Battle for Reliance." We
leave that to more uninformed media personnel, who
will serve all the semi-cooked news on a platter.
The bugle for the battle, if any, is yet to be
blown. When that happens, come back for an update.
We will provide informed comment.
PREVIOUS
PAGE
FIRST PAGE
BY A
CORRESPONDENT |
The
magic begins! Read all about 
