RIL reaffirms aid to Reliance Energy

Reliance Industries (RIL) today said that it will continue to provide "reasonable assistance" to Reliance Energy Ltd (REL) but made it clear that all group companies should take prior approval from the company before announcing any big project.

The development gains significance amid speculation that the announcement of a Rs 10,000 crore power project by REL is one of the controversial issues that triggered the spat between the Ambani brothers "" Mukesh and Anil. It was alleged that REL did not consult RIL before announcing the project.

In a press release, RIL said that it has replied to REL's letter dated December 4, 2004. The letter, signed by two of REL's independent directors, V P Malik and Leena Srivastava, sought the RIL board's views on REL's future prospects.

"Reply to REL's subsequent letter dated December 23, 2004, would be sent in accordance with decisions taken today, " the release added.

"The RIL board decided that reasonable assistance would be extended to REL in several respects, as desired by REL, without affecting RIL's operations and projects. It was also decided that it would be prudent to require that large projects of all RIL group companies be considered by RIL for approval if necessary. A suitable mechanism for this would be put in place in the interest of the shareholders." the release further said.

The RIL board reaffirmed that gas would be supplied for the Dhirubhai Ambani Energy City (DAEC) power project. "An appropriate official joint group would be set up to work out the details on operational and commercial aspects, " it said adding that additional pipeline linkages would need to be configured for supply of KG basin gas to DAEC.