Californian pension fund opposes Saudi appointment on RIL board

The California State Teachers’ Retirement System (CalSTRS), a US-based pension fund, has decided to oppose the appointment of Saudi Aramco’s chairman, Yasir Al-Rumayyan, as an independent director on the board of Mukesh Ambani-led Reliance Industries (RIL). This disagreement is due to Al-Rumayyan’s position in Saudi Arabia’s Public Investment Fund (PIF), as its governor, as well as in Aramco. PIF has already invested Rs 9,555 crore in Reliance Retail and Rs 11,367 crore in RIL’s Jio Platforms. Aramco and RIL have been in talks for another equity deal that in.....
The California State Teachers’ Retirement System (CalSTRS), a US-based pension fund, has decided to oppose the appointment of Saudi Aramco’s chairman, Yasir Al-Rumayyan, as an independent director on the board of Mukesh Ambani-led Reliance Industries (RIL). This disagreement is due to Al-Rumayyan’s position in Saudi Arabia’s Public Investment Fund (PIF), as its governor, as well as in Aramco.

PIF has already invested Rs 9,555 crore in Reliance Retail and Rs 11,367 crore in RIL’s Jio Platforms. Aramco and RIL have been in talks for another equity deal that involves 20 per cent of Reliance’s oil-to-chemical business.

An on June 30, 2020, CalSTRS held 5.3 million fully and partly paid shares of RIL, according to its website. CalSTRS is the America’s second largest public pension fund with assets totalling approximately $318.4 billion as of August 31, 2021.

CalSTRS’s opposition is based on a report by Glass, Lewis & Co., an American proxy advisory services company, that claims to advise more than 1,300 clients. According to Glass, Lewis & Co, its clients include a majority of the world’s largest pension plans, mutual funds and asset managers, who collectively manage more than $40 trillion in assets.

Speaking at the 44th annual general meeting (AGM) of RIL, Ambani said Al-Rumayyan “joining our board is also the beginning of internationalisation of Reliance. You will hear more about our international plans in the times to come”.

According to Glass, Lewis & Co., since Al-Rumayyan has a key role in the operations of Aramco and PIF, he does not qualify to be an independent director. Under the Indian law, an independent director cannot have a role in any company that has a business or equity partnership with the company that intends to appoint him or her. As PIF has a stake in RIL’s subsidiaries and Aramco is looking to buy stake in Reliance OTC Ltd, Al-Rumayyan’s ‘independence’ on the RIL board is under question.

RIL refused to comment on queries sent by Business Standard.

According to RIL officials in the know, Aramco Chief Yasir Al-Rumayyan can be an independent director since the stake buy deal is for a subsidiary of RIL and not the parent company. He would be the first non-Indian director on the RIL board.

In earlier deals, such as the ones with Google and Facebook, RIL had offered directorships to investors in its subsidiaries. David Fischer from Facebook and Donald Harrison from Google are part of the board of Jio Platforms. Google and Facebook bring in technologies while Jio gives them access to the Indian market.



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel
Key stories on business-standard.com are available to premium subscribers only.

Already a premium subscriber?

Subscribe to get an across device (Website, Mobile Web, Iphone, Ipad, and Android Phone applications) access to Premium content, Breaking News alerts, Industry Newsletters, Stock and Corporate news alerts, access to Archives and a lot more.

Read More on

RELIANCE INDUSTRIES

SAUDI ARAMCO

COMPANIES

NEWS


Most Read

Markets

Companies

Opinion

Latest News

Todays Paper

News you can use