Deloitte okays Reliance Ind's investment in Infocomm

Reliance Industries (RIL) is believed to have received a clean chit from the audit firm of Deloitte Haskins & Sells, on "compliance issues" relating to Reliance Industries' investments in Reliance Infocomm.

This will be the mainstay of the Reliance Industries' chairman and managing director Mukesh Ambani's defence before the crucial Reliance Industries board meeting on Monday, the first after the spat between Mukesh and the company's vice-chairman and managing director, Anil Ambani, over the ownership on the group came to light.

According to informed sources, the audit firm has certified that Reliance Industries has complied with all legal requirements while investing in Infocomm.

"There is not much of a fault that one can find out in the report," said an informed source. Dileep C Choksi, partner, Deloitte was not available for comment.

Reliance Industries had mandated Choksi to certify that the company had complied with all legal requirements prior to and after its investments in subsidiary companies.

A RIL spokesperson was not forthcoming on the issue. "Appointment of an audit firm is one of the options with Reliance Industries," he said.

It was learnt that the audit firm was first asked by Reliance Industries in July-August this year to "investigate whether the terms of investment in Reliance Infocomm were fair and proper". This included the terms of the sweat equity shares issued to Mukesh Ambani by Reliance Communication Infrastructure, the holding company of Reliance Infocomm.

Sources close to Anil Ambani said the audit firm refused to take up the assignment on the plea that "it is a commercial decision and auditors don't have benchmarks for this". So the audit firm was given a fresh mandate "to report on the compliance with all legal requirements and other compliance issues".

Sources close the audit firm declined to comment on this. They said in April-May this year, the audit firm did a valuation of shares of one of the Reliance group companies, but not of Reliance Infocomm.

Sources in Anil Ambani's side said that Anil Ambani is likely to argue before the board that the regular auditors of Reliance be asked to look at the subsidiary accounts all over again and make sure that all material information, not disclosed in the annual reports till date, be presented afresh.