No violation in superior power to CMD: RIL

Mumbai, Nov 29 | Updated: Nov 30 2004, 06:04am hrs
Reliance on Monday asserted that there was no violation of law or memorandum of association by its board in according superior power to chairman and managing director Mukesh Ambani and that the CMD would not explore legal option to counter issues raised by Anil Ambani.

The decision of the board is consistent with the practices in the Indian and international companies, a Reliance spokesperson told PTI in response to a questionnaire sent to Mukesh Ambani.

Asked if RIL board or CMD would explore legal options to counter issues raised by Anil Ambani in his letter of October 25, the spokesperson said, No. He is not. CMD has already said the corporate ownership issues concern future initiatives of RIL. Therefore, there is no occassion to consider legal recourse to sort them out.

In his letter addressed to CMD, vice chairman and managing director Anil Ambani had said, I have been legally advised 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, the memorandum and articles of association of our company and the agreements approved by the shareholders for the appointment of managing directors.

Asked when RIL board would meet to consider the issues raised by Anil Ambani, the spokesperson said, as of today no meeting is planned. The board meets as and when necessary.

He said that RIL board of directors had considered the note of the vice chairman and managing director taken on record and not accpeted its contention.

On the issue of 29% RIL stake, he said, the stake held by promoters remain in private domain and as a matter of policy RIL would not like to engage in a public statement on issues that are entirely in the private domain.

In his letter Mr Anil Ambani had urged the CMD to keep in abeyance the minutes of item no. 17 of the board meeting of July 27, which dealt with the very substantive matter concerning the redefinition of powers and authorities of RIL chairman and MD, vice chiarman and MD and executive directors, till a full discussion was held for deciding on the forward path on a mutual agreed basis.

PTI