RIL de-merger invalid if gas pact not implemented: RNRL
25 November 2009
Putting a new spin to his arguments before the Supreme Court in the Ambani vs Ambani case, counsel for Anil Ambani's Reliance Natural Resources Ltd Ram Jethmalani today argued that if the family pact reached in 2005 could not be implemented, the de-merger of the original Reliance Industries Ltd would be invalid.
In that case, Anil Ambani would be legally entitled to be reinstated as vice-chairman of a re-merged Reliance Industries. Before the two brothers went their separate ways, Anil Ambani was vice-chairman and managing director of the united RIL.
At the same time, the failure of the de-merger scheme also exposes RIL, now fully controlled by Mukesh Ambani, to the prospect of being wound up, Jethmalani argued.
"Under Section 392 of the Companies Act, if the scheme is not implemented as envisaged, Anil Ambani is entitled to be reinstated on the RIL board with full powers as existed before the 27 July 2004 board resolution," he said, adding, "This will not be in the interests of the millions of RIL shareholders.''
Jethmalani, RNRL's senior counsel, was putting his case before a Supreme Court bench comprising Chief Justice K G Balakrishnan and justices B Sudershan Reddy and P Sathasivam on Tuesday. His client Anil Ambani was himself present during court proceedings the previous day, causing much bemusement to the media. (See: Anil Ambani shows up in SC; claims 'deepest regard' for judiciary)
Jethmalani said the RIL board resolution of 27 July 2004 virtually stripped Anil Ambani of ''all powers, status, honour and dignity while giving complete control to Mukesh Ambani. This was the source of both anger and humiliation for Anil Ambani."