Reliance Industries Ltd has sought approval from shareholders to make Mukesh Ambani chairman and managing director of the company for another five years. He will not be drawing any salary for the said period.
In a special resolution, Reliance sought the nod of shareholders to appoint Ambani as the head of the company till April 2029.
The approval of shareholders is necessitated as Ambani will cross the company law-mandated age bar of 70 years for the chief executive of the company. Ambani will turn 70 on April 19, 2027.
Reliance said its board of directors on July 21 "re-appointed Mukesh D. Ambani as Managing Director, for a period of 5 years from the expiry of his present term, i.e. with effect from April 19, 2024."
Ambani opted to forego his salary due to Covid-19 pandemic until the company and all its businesses were fully back to their earnings potential. Accordingly, he has not been paid any salary and profit-based commission for three years in a row beginning FY21.
At the request of Ambani, "the Board has recommended that no salary or profit-based commission be paid to him for the proposed term from April 19, 2024 till April 18, 2029," the resolution shared with the shareholders said.
"He shall, however, be entitled to reimbursement of expenses incurred for travelling, boarding and lodging including for spouse and attendant(s) during business trips and provision of car(s) for use on company's business and communication expenses at residence shall be reimbursed at actuals and not considered as perquisites," the resolution said. "The company shall arrange to provide security to Ambani and his family members and the expenses borne by the company for the same shall not be considered as perquisites."
Observing that the company has grown exponentially under Ambani's leadership, the resolution said it would be “in the interest of the company that he continues to lead the company even after he attains the age of 70 years.” “Accordingly, approval of the members (shareholders) is sought for passing the resolution proposed (to give him another 5-year term) as a Special Resolution."
"In terms of Article 86(1) of the Articles of Association of the company, Shri Mukesh D. Ambani is not liable to retire by rotation. Regulation 17(1D) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 provides that in such cases, the continuation of the director shall be subject to the approval by the shareholders in a general meeting once in every five years," it said, adding he is being sought to be reappointed till April 18, 2029.
—With PTI inputs