MUMBAI, Sept 29 (Reuters Breakingviews) - Reliance Industries (RELI.NS) has strongly defended its decision to appoint Saudi Aramco’s (2222.SE) chairman, Yasir Al-Rumayyan, as an independent director to its board. Shareholder proxy advisory groups have publicly and privately baulked against the move, not least because the $230 billion Indian conglomerate is still trying to close a deal first announced two years ago to sell a large chunk of its oil-to-chemicals business to the global crude giant.
Boss Mukesh Ambani and his related entities own half of Reliance, meaning he can easily push through the appointment that requires a simple majority. The regulator’s tougher rules setting a higher threshold don’t kick in until January. But both parties will be embarrassed if a significant chunk of shareholders go against the appointment. The vote will also test institutional investors willingness to face up to two powerful men: India’s top company parks a lot of surplus cash with mutual funds and other institutions, and Al-Rumayyan is also the governor of Saudi Arabia’s giant sovereign wealth fund. The ultimate size of the investor rebellion will be telling. (By Una Galani)
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