Aramco chairman ‘good addition’ to RIL board: IiAS : Rashtra News
Indian proxy advisory firm Institutional Investor Advisory Services (IiAS) believes the appointment of Yasir Al-Rumayyan, chairman of Saudi oil major Aramco and governor of Saudi sovereign wealth fund, on the board of Reliance Industries (RIL), is a perfect addition to the board.
The advisory firm, however, said he should be appointed as a non-independent non-executive director — and not an independent director — for a balanced and durable representation on the board, given his investments in RIL.
Al-Rumayyan’s appointment as an independent director of RIL for three years on July 19, 2021, was opposed by institutional investors — California State Teachers Retirement System (owns 5.3 million shares of RIL) and Florida State Board of Administration — after recommendations made by prominent US proxy advisory firm Glass Lewis.
The appointment is now up for shareholders vote through the postal ballot that ends on October 19.
Amit Tandon, founder and managing director of IiAS told FE that Al-Rumayyan’s appointment is beneficial to the RIL board, given his deep domain knowledge and stature that matches that of Mukesh Ambani. However, Rumayyan’s sovereign wealth fund’s investments in RJio and Reliance Retail, and planned strategic investment by Aramco in RIL’s chemical business creates conflict in investors’ minds, if he continues as an independent director, he said.
Yasir Othman H. Al Rumayyan is the Governor of the Public Investment Fund of Saudi Arabia (PIF). He is also the non-executive chairperson of the Saudi Arabian oil company, Aramco. PIF has invested Rs 11,370 crore in Reliance Jio for a 2.32% stake and Rs 9,560 crore for a 2.04% stake in Reliance Retail Ventures. On the other hand, Aramco is negotiating for a 20% stake in RIL’s Oil to Chemicals (O2C) business.
On September 29, 2021, RIL in a statement to proxy advisory firms said, Rumayyan has no connection with the planned strategic transaction with Saudi Aramco. Also, Saudi Aramco will participate in the equity of the O2C subsidiary that would be spun off from RIL. “The O2C Subsidiary Board may have nominees of Saudi Aramco to protect its interest.”
The company further stated, that any material changes in circumstances at any time which may affect the status of a member of the board as an independent director is reviewed and appropriately acted upon by the Human Resources Nomination and Remuneration (HRNR) committee. Further, it is a practice in RIL that any director who is deemed interested recuses himself from participating in the relevant agenda item.
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( News Source :Except for the headline, this story has not been edited by Rashtra News staff and is published from a www.financialexpress.com feed.)
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