In the first signs of the succession plan being laid out by India’s largest business billionaire Mukesh Ambani quit the board of his $217 billion group’s telecom unit, Reliance Jio, and handed over the reins of the company to his elder son Akash.
In the filing to the stock exchange, Reliance Jio Infocomm Ltd said on Tuesday that the board, in a meeting held on June 27 “approved the appointment of Akash M Ambani, non-executive director, as chairman of the board of directors of the company.” The appointment comes after his father’s resignation at the end of business on June 27, the company was reported.
Jio is a division from Reliance Industries Ltd, whose business includes everything from oil refining and petrochemicals, to retail, media, and the development of new energy.
Ambani 65, who is a mother of three children, twins Akash and Isha and a son, the youngest Anant.
It is widely believed that he could transfer the reigns of the retail company to Isha 30 years old who is married to Anand Piramal (son of Piramal Group’s Ajay and Swati Piramal).
Akash and Isha were members of the board of Reliance Retail Ventures Ltd – the company which operates stores that sell consumers electronics, food, clothing, food, fashion, jewellery, footwear, and clothes and the online retail business, JioMart as well as the its digital arm Jio Platforms Ltd (JPL) since October, 2014.
Anant 26, has been recently elected as a director of RRVL. He has been a director of JPL since May, 2020.
As well as other appointments, Pankaj Mohan Pawar was named the as the Managing Director for Reliance Jio Infocomm for five years starting on June 27, the document reads.
Former finance secretary of the union, Raminder Singh Gujral and the former CVC KV Chowdary were appointed independent directors, the report said.
They’re both on the Board with Reliance Industries Ltd.
Reliance has three main industries – oil refining, petroleum chemicals, as well as retail and digital services which includes telecom. While digital and retail services are managed by distinct wholly owned subsidiaries The oil-to-chemical, or O2C operation is actually a part of Reliance. The energy business that is being developed is also part of Reliance’s parent company.
The three companies are nearly identical in terms of size. Although Akash and Isha have both been active in the new-age business of the group of telecom and retail, Anant is currently looking into the oil and renewable energy and chemical businesses of Reliance as a director.
The announcement is the clear transfer of wealth made by the tycoon of 65 years old who was at the center of an ensuing inheritance dispute between his brother and younger following their father passed away in 2002 without having a will.Ambani who’s net worth is more than $109 billion is still chief executive officer and chairman of Reliance Industries Ltd. The company’s wife Nita is 59 and is a member of the board of Reliance.
He is also president of Jio Platforms Ltd – the main company that controls all Jio digital services brands , including Reliance Jio Infocomm.
According to company documents in the filings, the Ambani family’s ownership stake of Reliance has increased to 50.6 percent, up from 47.27 percent at the end of March.
Ambani first mentioned an eventual succession plan on Reliance Family Day, which commemorates the birthday of the company’s founder, Dhirubhai Ambani on the 28th of December in the previous year.
Reliance Ambani had stated that the company that it was “now in the process of effecting a momentous leadership transition.” Before that point, during the company’s annual general assembly (AGM) which will take place in the month of June, 2021.
He said that his kids will be able to play a significant role within the vast empire of his family. He had stated: “I have no doubt whatsoever that the next generation of leaders at Reliance, led by Isha, Akash and Anant, will further enrich this precious legacy.” The succession plan is coming at a time Reliance is making an extremely costly transition to renewable fuels through investing across the whole value chain of batteries, solar, and hydrogen.
Similar to the steady flow of cash from refineries and petrochemicals helped make feasible for Reliance to start a telecom business out of the ground, its profits from retail and other digital ventures could be able to replace hydrocarbons — which are the primary source of wealth for the company — by utilizing green energy in the next 10 years.
Dhirajlal Hirachand Ambani also called Dhirubhai Ambani, founded Reliance in the year 1973. He was in charge of the family’s business growth from textiles to oil and telecom. However, the family was thrown into chaos following his sudden death in 2002.
The disagreements among Mukesh as well as his brother Anil increased and, following three consecutive years of conflict and a mother Kokilaben in 2005 split Reliance’s assets. Mukesh was given refineries, petrochemicals and petroleum and gas and textiles businesses While Anil was appointed in charge of telecom as well as asset management, entertainment and power generation.
In the course of time, Mukesh Ambani transformed Reliance into a giant by re-entry into the telecom industry, as well as ventures into retailing and renewable energy, while his business empire fell apart.
Since the beginning of 2019, Mukesh Ambani has been gradually reorganizing the top management at Reliance to ensure that the company’s governance is to be in line with international norms. He has sold the 32.97 percent share of Jio Platforms to likes of Google, Facebook and other venture capitalists, and also landed an array of foreign investors to invest in the retail business.
The new structure of Reliance will see various business verticals will be run as separate companies. There is no interdependence between the group businesses to raise capital or servicing debt. There is no need for interdependencies between the Ambani family also plans on consolidating holdings in the company.
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