Reliance defends Aramco exec’s appointment to company board

Reliance Industries Ltd (RIL) on Wednesday defended the appointment of Saudi Aramco chairman Yasir Al-Rumayyan as an impartial director after two of the Indian conglomerate’s institutional traders stated they’d oppose the transfer.

The Mukesh Ambani-led Reliance denied any hyperlink between Al-Rumayyan’s appointment and its ongoing talks to promote a stake in its oil-to-chemicals (O2C) enterprise to the Saudi oil large.

California State Lecturers Retirement Fund and State Board of Administration of Florida determined to vote in opposition to the proposal, following suggestions from proxy adviser Glass, Lewis and Co., which had red-flagged the board appointment due to potential battle of curiosity.

Al-Rumayyan can also be governor of Public Funding Fund, Saudi Arabia’s sovereign wealth fund, and serves on the boards of ride-hailing firm Uber Applied sciences Inc. and cellphone chip designer ARM Ltd.

“The appointment of H.E. Yasir Al-Rumayyan has no reference to the contemplated transaction with Saudi Aramco,” Reliance stated in an alternate submitting. “Additional, as accredited by the shareholders, the O2C enterprise of Reliance is being spun off right into a subsidiary, and as per the phrases of the proposed transaction, Saudi Aramco will take part within the fairness of the O2C subsidiary. The O2C arm board might have nominees of Saudi Aramco to guard its curiosity.”

Reliance named Al-Rumayyan as an impartial director for a time period of three years. Ambani had in August 2019 introduced talks for the sale of a 20% stake within the O2C enterprise, comprising its oil refineries at Jamnagar in Gujarat and petrochemical belongings, to the world’s largest oil firm. The deal was to conclude by March 2020 however has been delayed for causes not disclosed by both firm.

A current report in Monetary Instances stated Aramco is weighing paying for the stake with its shares initially, after which staggered money funds over a number of years. The report stated the proportion of shares versus money was nonetheless up for debate. Analysts have stated Aramco’s stake buy in Reliance’s O2C enterprise would additional strengthen the Indian firm, which had raised ₹3.24 trillion in capital from stake gross sales in its items, a rights concern and asset gross sales final yr.