REL board will consult RIL on ‘future prospects’

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Mumbai, Nov 30: The ongoing Ambani tussle over ‘ownership issues’ took a new turn on Tuesday when the Anil Ambani-led board of Reliance Energy Ltd (REL) said it would separately consult the board of its principal shareholder Reliance Industries Ltd (RIL) on REL’s future prospects and ‘related issues’.

At a marathon meeting on Tuesday, the REL board also called upon the six directors who had resigned last week to reconsider, and in the meantime continue to function as before.

The REL board also reposed full trust and confidence in the existing management. The Tuesday board meeting had been called to specially discuss the resignations by Satish Seth, executive vice chairman, KH Mankad (director-finance), SC Gupta (director-finance), Amitabh Jhunjhunwala (RIL representative), JP Chalasani (director-business development) and Prof J Ramachandran (non-executive director).

Hounded by mediapersons late in the evening when he emerged from the board meeting held at Reliance Group headquarters Reliance Centre in south Mumbai, REL chairman and managing director Anil Ambani refused to make any comment on the meeting.

The board resolution to separately consult the board of its principal shareholder RIL, which has a 50.8% stake in REL, is important, especially when REL has already started work on its Rs 11,000 crore Dadri project (3,740 mw) in Mulayam Singh Yadav-ruled Uttar Pradesh. REL hopes to achieve financial closure for the Dadri project in early January 2005. Further, REL would need gas supply from RIL in addition to supplies from other players.

REL has also announced plans recently of picking up equity in the distribution companies floated by the UP government and also making an investment of upto Rs 1,500 crore in the Anpara C project in UP.

An REL media release said: “At the meeting held today, REL’s board of directors also decided to separately consult the board of its principal shareholder, RIL, on several matters concerning the future prospects of the company, and related issues.” However, the REL release did not elaborate on which are those “related issues” on which it would separately consult the RIL board.