Mukesh & RIL knew about MoU, says RNRL

 
“Mukesh Ambani had a controlling shareholding in Reliance Industries Ltd (RIL) and entrusted with substantial power to manage the company,’’ said RNRL Advocate Ram Jethmalani before a bench headed by Chief Justice K G Balakrishnan. Continuing his arguments, Jethmalani said there was no difference between RIL and Mukesh as stated by RIL advocate Harish Salve during his argument last week that RIL was not a party to the memorandum of understanding signed between Mukesh and Anil.

Board resolution

Citing the board resolution of RIL passed on July 27, 2004, Jethmalani said Mukesh as chairman & Managing Director, being accountable and responsible to the board, will exercise the specific power to allocate, delegate or assign specific duties, responsibilities and powers to managing director(s), whole time director(s) and all executives and employees.

Jethmalani said the authority of Anil, Vice Chairman & Managing Director, was withdrawn and the resolution said “he would carry out the orders and directors given by the board from time to time in all respects and conform to and comply with all such directions and regulations as may from time to time be given and made by the Board and his functions will be under the overall authority of the chairman and managing director hereinabove.’’

He said the government policy has to have a consistency and it could not be changed every now and then by referring to the production sharing contract (PSC) policy which was implemented on a later date after the MoU was signed between the two bothers.

He said all clauses of scheme of demerger had to be implemented in its totality otherwise Anil would have to be taken back as Vice President and two groups to be again merged after 18 months. The scheme was approved on December 9, 2005 and filed before the company court on September 16, 2005. “My client would be reinstated to the position which he was holding before July 2006,’’ Jethmalani said.

According to the scheme which was approved by the RIL board, two group of companies would come into existence led by Mukesh and Anil; and the subsidiary companies obedient to Mukesh would be independent and would be headed by Anil, Jethmalani said in the Supreme Court.