The Hindu Business Line : Vesting powers with Mukesh — `Anil's investment plans forced Reliance Ind board'

RELIANCE Industries' Vice-Chairman and Managing Director Mr Anil Ambani's political involvement and his act of committing the company to large investments without taking the RIL board into confidence precipitated the July 27 board meeting, say informed sources.

The board consolidated the powers of day-to-day operations in the hands of Mr Mukesh Ambani, Chairman and Managing Director, at the meeting.

The sources told Business Line that neither Mr Mukesh Ambani nor the board members were taken into confidence before the announcement of these investment plans.

The idea of passing Item No. 17 was to protect the Reliance group's interests, they said. It was apparently these commitments made by the Vice-Chairman without the consent of the board of directors that triggered off the present controversy. According to them, the board was left with no option but to move the proposals of July 27.

One of Mr Anil Ambani's "unilateral" announcements, the setting up of the 3,500-MW power project in Uttar Pradesh, would have entailed an investment of Rs 10,000 crore. As the funds for this project would have had to come from RIL, the board, it is understood, felt that a single line of command would have to be put in place.

There were other decisions allegedly taken by Mr Anil Ambani on his own, such as becoming an advisor on the board of the Uttar Pradesh development council and thereafter joining the Samajwadi Party and entering the Rajya Sabha as an MP, that had implications for RIL.

At the end of the day, there could only have been a single chain of command with RIL moving from around one-lakh employees to 5 lakh and from being present only in a few locations to 5,000 or more.

There had to be clarity as to who is accountable for what, the sources said.

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