Business Line Twenty Years Ago Today

Reliance ushers corporate democracy

Reliance Industries has announced the issue of bonus shares in the ratio of one equity share for every share held. The ratio was announced by the Chairman, Mr. Dhirubhai Ambani, at the company’s annual general meeting. The ratio was recommended by the board which met at the same venue after seeking the shareholders’ view on it. The bonus issue would have to be approved by an EGM as it was not part of today’s AGM resolutions. “I am delighted to announce that after due consideration of your views and deliberations, the board of directors of the company has recommended bonus in the ratio of 1:1,” Mr. Ambani told the shareholders who had earlier suggested several ratios including 1:1, 2:1, and 3:5. The AGM, according RIL officials, was attended by over 3,000 shareholders, out of its total shareholder strength of 26 lakhs. This is the third issue of bonus shares by Reliance after it went public in 1977 and first in the past 14 years. The first issue of bonus share was in 1980 and second in 1983, both in the ratio of 3:5.

Dhirubhai does it again

In a gesture quite typical of his AGMs, Mr. Dhirubhai Ambani finalised the ratio of RIL’s bonus issue after a brief board meeting at the AGM. Mr. Ambani, who gained form with each minute of the twenty-third AGM, said at the start that the bonus ratio would be decided after hearing shareholders’ expectations. While most of investors lauded Mr. Ambani’s plan, there were sceptics, one of whom said it was a “ploy” to please investors. “If that is what you wish to think, then go ahead,” a visibly agitated Dhirubhai retorted. The main concern of shareholders was that the ratio must be one that benefits them, at the same time reducing the price to a level affordable to the public.

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