Asia’s richest man Mukesh Ambani began executing a succession plan for his USD 200-billion energy-to-technology conglomerate Reliance Industries, appointing his three children Isha, Akash, and Anant to the board of the company which he will continue to chair for five more years.
Till now, the three children were involved only at operating business-level and none were on the board of the India’s largest listed company.
The board of Reliance met ahead of the company’s annual general meeting to approve the appointment of twins Isha and Akash as well as Anant, as the ”non-executive directors of the company,” the firm said in a stock exchange filing on Monday.
At the shareholders’ meeting, Mukesh Ambani said US Ivy League university-educated scions have ”earned their stripes” and he saw ”the flame” of his legendary father Dhirubhai shine in them.
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The 66-year-old tycoon, joined the board of India’s most valuable company at the age of 20 years in 1977, has secured another five-year term as the company head after expiry of the current terminal on April 19, 2024.
”Today, I see both my father and me in Isha, Akash, and Anant. I see the flame of Dhirubhai shine in all of them,” he said, adding he would mentor them for the leadership role. ”I shall continue to perform my duties and responsibilities as Chairman and Managing Director for five more years, with greater vigour.” Ambani has been talking about succession since 2021. Last year, he handed over the baton of India’s largest mobile firm Reliance Jio Infocomm Ltd to his first-born Akash Ambani, and identified retail business for his twin sister Isha, 31, and new energy business for Anant, 27.
Jio Infocomm is a subsidiary of Jio Platforms, in which Meta and Google hold stakes and is still chaired by Mukesh Ambani. Reliance Industries Ltd is the parent of Jio Platforms.
Reliance also said Mukesh Ambani’s wife Nita has stepped down from the board to focus more on strengthening the firm’s charity arm. She will continue attend all board meetings as a permanent invitee in capacity as the Chairperson of Reliance Foundation.
Reliance has till now had three main business — oil and petrochemicals, telecom and retail — one each identified for the three siblings. Recently, it has added financial sevices business, to which Isha Ambani has been appointed as a board member.
Akash Ambani, who attended Brown University, was part of a team that brokered multi-billion dollar investment in Jio Platforms, and also mentors the group’s IPL cricket team. Isha Ambani, who graduated from Yale University and studied MBA at Stanford University, has been driving the expansion of Reliance Retail into new categories and geographies.
Anant Ambani, who also went to Brown University, is involved with the recently launched new energy business that is supposed to help offset emissions from Reliance’s mainstay fossil fuel business. An animal lover, he was the force behind building a zoo in Gujarat and is also said to take keen interest in corporate affairs and security detailing of his father.
Akash and Isha, who is married to Anand Piramal (son of Piramal Group’s Ajay and Swati Piramal), have been regulars at Reliance AGMs for the last couple of years, making presentations on new pathways in the businesses they looked after.
In a statement, Reliance said their ”appointment will take effect from the date they assume office after approval by the shareholders.” While retail and digital services are housed in separate wholly-owned subsidiaries, the Oil-to-Chemical or O2C business is a functional division of Reliance. The new energy business is also with the parent firm.
The three businesses are almost equal in size.
The latest announcement is a clear sign that Mukesh, who was embroiled in a bitter inheritance dispute with his younger brother after their father Dhirubhai died in 2002 without a will, is preparing to handover the baton to his children in the future.
Mukesh and his brother Anil fought a bitter battle for control of Reliance Industries. After a protracted public spat, their mother brokered the split in 2005; Mukesh took oil and petrochemicals while Anil got telecommunications, power, and financial business, among other units.
But their fortunes diverged — while Mukesh rose to become the richest Asian, Anil pleaded ”zero” net worth to a London court in 2020.
The brothers, however, seemed to have reached a detente in recent years. In 2019, Mukesh helped Anil to make a USD 77 million payment that allowed him to escape jail. They also annulled a non-compete agreement, allowing Mukesh to re-enter the telecom business with Jio, and now a financial business unit.
A Stanford dropout, Mukesh turned his father’s textiles-to-petrochemicals business into India’s most powerful conglomerate. Reliance’s Jamnagar refinery is now the world’s biggest single-site integrated refinery complex while Jio is the largest telecom firm with 450 million subscribers and its retail business is the biggest network of shops.
Akash and Isha have been on the boards of Reliance Retail Ventures Ltd (RRVL) — the company that operates supermarkets offering consumer electronics, food and grocery, fashion, jewellery, footwear, and clothing as well as the online retail venture JioMart, and digital arm Jio Platforms Ltd (JPL) since October 2014.
Anant has recently been inducted as a director on RRVL. He has been a director on JPL since May 2020.
The succession plan comes at a time when Reliance is in the middle of a very expensive switch to clean fuels by investing across the entire value chain of solar, batteries and hydrogen.
Just as steady cash flows from oil refining and petrochemicals made it possible for Reliance to incubate telecom from scratch, profits from digital businesses and retail may allow it to replace hydrocarbons — the conglomerate’s traditional source of wealth — with green energy over the next decade.
Dhirajlal Hirachand Ambani, also known as Dhirubhai Ambani, founded Reliance in 1973. He led the family business expansion from textile to oil to telecom but the family plunged into chaos after his sudden death in 2002.
Since 2019, Mukesh Ambani has been slowly overhauling the top-heavy hierarchy at Reliance to improve governance in line with global standards. He sold a 32.97 per cent stake in Jio Platforms to the likes of Google, Facebook and other venture capitals and got a clutch of foreign investors in the retail venture.
In Reliance’s new structure, different business verticals will be run like independent businesses. There will be no interdependencies between group companies for raising capital or debt servicing. The Ambani family is also consolidating its ownership in the company.