Reliance Aramco I Reliance Responds After Questions on Proxy Board on Appointment of Saudi Aramco Chairman to RIL Board of Directors
President of Saudi Aramco, Yasir Al Rumayyan | Photo credit: Twitter
Reliance Industries has defended its decision to appoint Saudi Aramco chairman Yasir Al-Rumayyan to its board as an independent director despite reservations from some investors.
He said there was “no connection” between the talks to appoint and sell shares between the two companies. The conglomerate in a swap case said the appointment complied with all of Sebi’s regulations. Previous proxy consultancies have also questioned the move, citing ongoing negotiations between the company controlled by Mukesh Ambani and Saudi Aramco over a possible deal to sell shares.
“The appointment of Yasir Al Rummayyan has no connection with the proposed transaction with Saudi Aramco. In addition, as approved by shareholders, RIL’s 02C business is in the process of being transferred to a subsidiary and, under the terms of the proposed transaction, Saudi Aramco will participate in the capital of subsidiary 02C. The 02C branch board may have candidates from Saudi Aramco to protect its interests. Any material change in circumstances at any time that may affect a Board member’s status as independent director is reviewed and appropriately addressed by the NHNR Committee. In addition, it is customary within RIL for any director deemed interested to decline to participate in the relevant item of the agenda ”, indicates the RIL press release.
The conglomerate announced in August 2019 that it was in talks with the oil and gas giant to sell a 20% stake in its oil-to-chemicals (O2C) business for an enterprise value of $ 75 billion. of dollars. In September 2020, RIL announced its intention to create a separate entity for the O2C business. The two companies are continuing negotiations but have not given a final timetable for the deal.
Ambani announced Al-Rumayyan’s appointment to RIL’s board of directors at the company’s 44th annual general meeting held on June 24 this year.
RIL responded after US proxy advisory firm Glass, Lewis & Co said Al-Rumayyan was not qualified to be an independent director on RIL’s board as he plays a key role in operations. of Aramco as Chairman and Governor of the Public Investment Fund (PIF).
According to Indian law, an independent director in a company should not have any role in a company that has a business or capital relationship with the company that wishes to appoint him. Al-Rumayyan’s “independence” has been called into question as Aramco seeks to acquire a stake in RIL and PIF already holds a stake in subsidiaries of RIL.