Early warning came in Anil’s upset emails, dissenting note

On the other hand, the Mukesh Ambani group insists that the board meeting only reiterated the powers of the Chairman as they existed during Dhirubhai Ambani’s lifetime.

The key points raised in Anil Ambani’s four-page dissent note (October 25) and two emails sent in July:

• ‘‘For 20 years Mukesh and Anil Ambani have functioned as equals, as Managing Directors reporting to the Board.’’ (Mukesh Ambani was made Vice Chairman and Managing Director during Dhirubhai Ambani’s lifetime and Anil Ambani was Joint Managing Director.)

• ‘‘Mukesh Ambani now abuses his position to usurp sweeping powers for himself.’’ (The Mukesh Ambani camp says that the Reliance chairman already had such sweeping powers and they have merely passed on to Mukesh).

• ‘‘Mukesh Ambani wants to revoke, modify or countermand any actions or decision taken by Anil Ambani.’’

• ‘‘Mukesh Ambani and Anil Ambani to function under his i.e. Mukesh’s authority.’’

• ‘‘Anil Ambani victimized by Mukesh Ambani for stressing on highest standards of corporate governance to protect the rights of 35 lakh shareholders of Reliance.’’

• ‘‘Matter surreptitiously and clandestinely pushed through Board by Mukesh Ambani under (Item 17) “Health, Safety and Environment Committee”.’’

About the July 27 board meeting, Anil Ambani alleges that the import of the resolution was hidden from him although it was discussed with other board members and key employees. The point is that the resolution reiterating the powers of the Chairman was slipped in under a newly constituted ‘Committee of Directors’ called the ‘Health, Safety and Environment Committee’ and as part of a supplementary agenda.

Anil Ambani’s angry objection has been recorded in an email to Mukesh Ambani dated July 29. The email makes it very clear that the problems between the brothers were heading for a confrontation right then and the younger sibling accuses the older brother of not showing the “courtesy of discussing these agenda items with me”.

In one communication, he writes to Mukesh, “I want to bring to your attention the following issue, which I consciously did not raise at the RIL Board meeting on July 27, to avoid embarrassment of any kind to anyone.”

This was followed up with another email dated July 30 asking Mukesh Ambani to keep the crucial “item no. 17” in abeyance and not disturb the “status quo” without a “full discussion, debate and agreement between us”.

He threatened to write an official dissent and followed it up with a four-page dissent note dated October 25, which articulates his complaints. This alludes to legal advice obtained by him to the effect that the “proposed redefinition of powers of the Managing Directors is not in accordance with law, and is in conflict with the provisions of the Companies Act 1956” and with Articles of Association approved by shareholders.’’

But sources close to the company say that Anil Ambani’s letter was read out at the board meeting. The board considered “the letter of Shri Anil Ambani and his dissent to Item No. 17. After discussion, the board decided not to accede to the request of Shri Anil Ambani to keep the item in abeyance”.

So the dissent was noted and recorded but not accepted.