Reliance Industries sets up two committees

Reliance Industries today constituted two committees.

A six-member committee will determine the "fair price" and the right timing of conversion of preference shares of Reliance Industries in Reliance Infocomm. To do that, the committee may appoint international valuers.

Another committee has been formed to oversee observance of corporate governance. This panel, consisting of independent directors, will oversee the observance of corporate governance at all levels.

It will also interact with the media and protect the company's image. It will be the interface with various stakeholders of the company "" investors, media and institutions.

If the need arises, it will seek the assistance of consultants to communicate the company's policies with the outside world. So far Anil Ambani has to a large extent been doing this job.

The six independent directors of the company will consider all matters pertaining to exercise the option to convert 162 crore cumulative convertible redeemable preference shares of Rs 8,100 crore.

The committee may appoint one or more valuers of international repute to determine the fair value of the equity shares of Reliance Infocomm, a RIL release said.

The appointment of a committee follows wide speculation on Reliance Industries' investment of Rs 8,100 crore in Reliance Infocomm through subscription of preference shares.

The shares, having a face value of Re 1 with a premium of Rs 49, has been at the centre of criticism ever since the spat between the Ambani brothers was brought to the light.

Reliance today said the company gets an eight per cent tax-free yield from the preference shares which is higher than Reliance's cost of loan funds.