Ambani rivalry spills over at shareholder meeting
Anil Ambani on Tuesday used an annual shareholders’ meeting to lay into his older brother and the government for good measure, over the issue of gas pricing which is at the heart of the most recent spat between the fighting Ambani brothers.
Anil charged Reliance Industries, India’s top private-sector conglomerate run by estranged brother Mukesh, had used every trick in the book, and some outside the book, to feed its “greed”, and was firing from the shoulder of the oil ministry that he claimed was being “partisan”.
The 90-minute diatribe livened up what threatened to be an otherwise staid shareholders’ meeting, with accusations, pleas, emotions, tears and the inevitable invocations of the father, founder Dhirubhai Ambani, whose death helped bring the feud between the two brothers out in the open. All peppered with energetic cries of support from shareholders.
The dispute next comes up for hearing at the Supreme Court on Sept. 1.
Leaving aside the legal issues, was it right for Anil to have used a shareholders’ meeting to wash the family’s dirty linens and take potshots at the government? Certainly, there are implications for the company’s earnings and therefore shareholder value. But does that make it OK to discuss a matter that is sub-judice?
The two brothers have fought before in the full glare of the media spotlight, and are quite likely to do so again. Anil has already given interviews to all major newspapers stating his stand, signalling that the gloves are off in this stage of the Ambani battle.
Is this the start of a new season for shareholders’ meetings? We’ve often bemoaned the lack of shareholder activism in India, but clearly a big family business like the Ambani’s thinks nothing of using a shareholder meeting to air grievances against a sibling.
Whither shareholder activism?
July is the season for shareholder meetings, an annual rite of passage for Indian companies, with directors, shareholders and reporters trooping into large, badly-lit auditoriums to hear the chairman speak glowingly of the achievements of the past year, and a litany of woes from shareholders.
As a reporter who has covered many of these meetings of some of India’s largest companies, I have quickly learned that shareholders’ questions have little to do with family squabbles, succession policy, ill-advised acquisitions, or unflattering media reports.
Instead, they usually range from pleas for factory visits and bigger dividends to the quality of the snack served at the meeting. A few will ask about the cost of printing the annual report, and offer up suggestions for new advertising campaigns or congratulatory verse on the company.
Rare is the instance when shareholders pose tough questions, let alone dissent.
Contrast that with the narrow escape the chief of British retailer Marks and Spencer had in one of the biggest shareholder rebellions in recent years, with shareholders questioning the departure of a senior official and calling for the separation of the roles of chairman and chief executive that Stuart Rose held.
Other British firms have faced shareholder ire over such matters as CEO pay hikes, stock bonuses and merger plans, with shareholders forcing CEOs to shelve these plans and even to quit.
In India, some shareholders had questioned Tata companies on falling profits years ago. A few others have also asked consumer goods maker Hindustan Unilever for updates on a thermometer factory in southern India which Greenpeace had accused of causing pollution.
the article really shows the “lack of utility” of these shareholdes meetings and unawareness of the shareholders at large of their powers.
It is true that Gas is a Nation’s property… but most in India would have preferred the government to be supportive of lower gas prices rather than higher prices and the is not in any way adding to its credibility