Reliance Energy to give RIL more power

Reliance Energy Limited (REL), of which Anil Ambani is the chairman and managing director, is planning to give sweeping powers to the group ...

Reliance Energy Limited (REL), of which Anil Ambani is the chairman and managing director, is planning to give sweeping powers to the group flagship, Reliance Industries, on the composition of the REL board and appointment of top officials.

Through a postal ballot, Reliance Energy has sought amendments in its articles of association to empower Reliance Industries to nominate all its directors, chairman, vice-chairman and managing director. The RIL board had given these powers to Anil Ambani last year. REL came under the Reliance fold in January 2003.

In a communication to the Bombay Stock Exchange, Reliance Energy stated that so long as ‘‘the Reliance group of companies and its associates hold over 26 per cent paid up voting equity shares, and are the single largest shareholding group, they shall have the right to appoint majority of the directors on the REL board.’’ Reliance owns 50.15 per cent stake in Reliance Energy, making the latter a subsidiary.

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The move comes even as brothers Anil and Mukesh feud over the control of the group. Yesterday, Amitabh Jhunjhunwala, a director on the board of Reliance Energy and treasurer of Reliance Industries, resigned from both positions. Last month, six directors on the Reliance Energy board, including Jhunjhunwala, had resigned, but the REL board, after a marathon meeting on November 30, asked them to continue.

REL said the existing provision in the articles of the association will be substituted with a new provision: ‘‘RIL shall designate one of the directors to be the chairman of the board and may also designate one of the directors to be the vice-chairman of the board; and RIL shall determine the period for which each of them is to hold such office and the chairman and the vice-chairman so designated shall not be liable to retire by rotation.’’

It was, however, not clear as to which existing provisions in the articles of association the company now sought to amend or what the gameplan is in seeking this change.

A top RIL official had recently told The Indian Express that Anil Ambani was last year given sweeping powers to appoint the directors and key officials in REL.