Ambani’s youngest son too inexperienced for board seat, proxy advisers say

Shareholders in Reliance Industries should reject the appointment of tycoon Mukesh Ambani’s youngest son to the oil-to-data conglomerate’s board, two proxy advisers have said.

Institutional Shareholder Services and Mumbai-based Institutional Investor Advisor Services have argued that the youngest of Ambani’s three children, 28-year-old Anant, is too inexperienced to be a non-executive non-independent director on the board of India’s biggest company by market capitalisation.

Both proxy advisers however backed the appointments of 31-year-old twins Akash and Isha.

Given the Ambani family and other insiders have 49 per cent voting rights, Anant is likely to be appointed to Reliance’s board despite shareholder objections. But the dissent over Anant’s experience points to scepticism his father could face as he seeks to convince investors over his succession plan.

Ambani is aiming to carve Reliance Industries into three interconnected business verticals that can be listed separately — digital business Jio, shopping arm Reliance Retail, and a core energy business expanding into renewables — to be headed by each of his three children. Anant is involved in the energy unit.

Ambani, 66, is tackling his succession to avoid repeating the power struggle that broke out between him and his brother Anil after their father Dhirubhai died in 2002 without leaving a will.

While Mumbai bankers expect professionals to continue managing Reliance’s businesses, Ambani said in this year’s annual general meeting in August that his focus has turned to bringing up the company’s next generation of leaders — and “I shall especially mentor Akash, Isha and Anant so that they can provide collective leadership,” he said.

He added that they would be appointed to Reliance’s board by the end of the year. Shareholders are voting on the appointment by postal ballot, concluding on October 26.

In his AGM speech, Ambani emphasised that his father, the company founder, had appointed him to the board when he was 20.

ISS said that while it acknowledged Anant’s “appointment is part of the succession plan of the company,” his experience in the company of eight years and leadership experience of six years raised “concerns on his potential contribution to the board”.

Anant’s age “does not align with our voting guidelines”, IIAS said. Bloomberg first reported ISS’s recommendation.

Reliance told the proxy advisers that Anant had been “part of the Reliance group since 2015“, when he would have been 20, and that he has been on the boards of subsidiaries Reliance New Energy Limited and Reliance New Solar Energy Limited since 2021, where he participated in “decision making” for large strategic investments.

Anant’s career history, Reliance argued, along with “having been groomed by the senior leadership over the years has given him the relevant experience and maturity to add value to the board deliberations.” It did not give details of any work experience beyond Reliance.

InGovern Research Services, a Bengaluru-based proxy adviser, endorsed Anant’s appointment. “If you have voted for the other two kids who are 31-years-old, why not recommend this one?” said InGovern’s founder and managing director Shriram Subramanian, saying the age difference was minor.

Subramanian added that institutional investors in Reliance were comfortable with the board appointments because Reliance is “professionally managed, Mukesh Ambani is obviously monitoring, but the board is comprised of independent directors of eminence”.

Although the scions have presented at Reliance’s AGMs, they have not given any interviews to independent business outlets. They are “being groomed,” Subramanian said.

Bloomberg reported that US proxy adviser Glass Lewis also endorsed Anant’s appointment.

It comes as Reliance has raised $1.8bn in fresh investments to fuel expansion for its retail business, spins out a non-bank finance business and presses ahead with so-called giga factories for manufacturing components needed in the energy transition, such as batteries.