REL asks directors to reconsider resignation

Amid reports that announcement of Rs 11,000 crore (Rs 110 billion) investment in Uttar Pradesh by Reliance Energy was among the reasons for rift between the Ambani brothers, REL on Tuesday decided to approach parent company Reliance Industries on its future prospects and reposed full faith in the present management led by REL Chairman and Managing Director Anil Ambani.

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While asking six directors to reconsider their resignation, announced on November 25 at the height of the battle over control of Reliance Empire, REL also decided to 'separately consult the board of its principal shareholder Reliance Industries Ltd on several matters concerning the future prospects of the company and related issues.'

After an over three-hour meeting, chaired by Anil Ambani, a company spokesperson told reporters that the board met to consider the resignations of the six directors, including executive vice chairman Satish Seth.

"The board reposed full trust and confidence in the existing management of the company and decided to request the six directors to reconsider their resignations," a company statement said, adding that the board also decided that these directors would continue to function normal as before.

Other directors who resigned are J P Chelsani, A H Mankad S C Gupta, J Ramachandra (Independent Director) and Amitabh Jhunjhunwala (RIL nominee).

According to news reports quoting informed sources, Anil Ambani's act of committing large investments without taking the RIL board into confidence precipitated the July 27 board meeting, which through a resolution conferred superior powers to Chairman and Managing Director Mukesh Ambani.

Anil Ambani had subsequently questioned the redefinition of powers to Chairman and Managing Director and Vice Chairman and Managing Director saying according to legal advice received by him, the passage of the proposal was not legal and in contravention of the Companies Act.

In the subsequent board meeting on October 25, Anil's letter to the CMD was read out at the RIL board meeting but his contentions were rejected, according to an RIL spokesperson.