RIL should hold majority in Infocomm: Anil Ambani

The 500-page note on corporate governance in the Reliance group, authored by Anil Ambani, contains a number of allegations and suggests steps to prevent "failures of governance" in future.

Anil, vice-chairman of the flagship company Reliance Industries Ltd (RIL), engaged in a bitter feud with his elder brother and RIL chairman Mukesh Ambani, sent the note to the company board's corporate governance committee a few days ago.

Committee chief Y P Trivedi yesterday said the committee was "looking into" the issues raised in the document. Anil alleges in the voluminous document that RIL's investments in and transactions with reliance infocomm, also headed by Mukesh, have been conducted in a manner "detrimental" to the interests of RIL shareholders, informed sourced stated today.

In the note, Anil has said past decisions and authorisations for RIL's investment in Reliance Infocomm groups were obtained without proper disclosure of all relevant facts to the flagship company's board.

Sources said the younger Ambani suggested that there be an "arm's length" shareholder agreement between RIL and other shareholders of Infocomm group dealing with preservation of ownership pattern and governance and management among other issues.

Such an agreement should also deal with minority protection, divestment and avoidance of conflict, they said.

Alleging a clear conflict of interest between RIL and the Infocomm group, the note said this was enhanced owing to related party transaction of substantial magnitude, leading to substantial loss of value for RIL shareholders.

Sources said the note also questioned the accuracy of the minutes of board committee proceedings for RIL's investment in Reliance Infocomm and said the flagship company's ownership in Infocomm needed to be substantially increased from 45 per cent so that RIL enjoyed significant and direct majority and control.