Archive for July, 2014

Akash Ambani Hopes to Follow in Illustrious Family Legacy

July 24, 2014

The fact that Akash Ambani is working with Reliance Jio Infocomm Limited (RJIL) has garnered a lot of attention. Mukesh Ambani’s elder son, Akash graduated from Brown University with a degree in economics some time back and has since then being groomed for a role at Reliance Industries Limited (RIL), a company which was started by his grandfather, Dhirubhai Ambani.

Incidentally, the Ambani scion wasn’t keen on returning to his home land after graduation. “I wanted to work in the US,” says Akash. However, Mukesh Ambani managed to convince the twenty-something to return to his homeland. Passionate about technology, Ambani Jr., returned at the allure of working at Reliance Jio, one of RIL’s most ambitious projects.

An Incredible Legacy:

Akash Ambani’s is following in the steps of his father, Mukesh Ambani who took over the reins of RIL, a company founded by Dhirubhai Ambani in the 60’s. Under Mukesh’s leadership, the company has diversified into Petrochemicals, retail and has even a huge presence in the Indian sporting market. Asked if he feels intimidated in continuing in the family business, Ambani Jr., said he feels inspired rather than intimidated. “It motivates me,So far my experience (at Jio) has been incredible. It’s a lifetime opportunity to contribute to one of the largest rollouts of digital services in the world,” he said.

More importantly, it’s a chance for him to learn the ropes of the business in a similar way his father did nearly three decades ago. Mukesh Ambani dropped out of Stanford University’s Graduate School of Business and returned to RIL to help out his father. Scions of business families work their way up and it is no different with the Ambani’s. At age 24, current chairman and managing director of RIL Mukesh Ambani learnt the fundamentals of the group’s flagship petrochemicals business by shadowing his father, the late Dhirubhai Ambani. Akash is being similarly mentored.

No wonder then that Akash got a taste of company affairs at a young age. He was seen at his father’s side when RIL inked a deal with British Petroleum (BP) in 2011 and he also sat through all critical meetings and learned the ropes of the business from the beginning. Right now though, his focus is on Reliance Jio’s incredibly vast offerings, not to mention 4G services which are expected to have a tectonic impact on India’s burgeoning telecom industry. He has a five day week at the Navi Mumbai office, 50 km from his house on Altamount Road. Only time will tell if Akash Ambani will build upon the illustrious legacy of his family.


Reliance Industries clarifies its position on the KG-D6 Issue

July 18, 2014

Reliance Industries Limited (RIL) has released a statement regarding the KG-D6 gas price issue. The Mukesh Ambani-owned company categorically states that the government’s move to disallow it recovery of certain costs relating to the D6 gas block in the Krishna-Godavari basin (KG-D6) did not amount to a penalty. Further, this was not in line with the contract it had signed with the Government when it was allotted exploration and production rights nearly a decade back.

RIL issued a statement at the Bombay Stock Exchange (BSE) regarding the penalty imposed by the government for the fall in the output levels of KG-D6 basin. In a statement, the company said, “RIL and its partners believe the purported rationale of the government, in proportionately disallowing the cost in the ratio of actual production to the estimated production from D1-D3 fields in KG-D6 is not as per the Production Sharing Contract (PSC).”The exchange had earlier sought a clarification from RIL on a news article saying the latter had been slapped with a new fine of $579 million. The company said media reports “apparently” misquoted the disallowance of cost recovery by the government as levy of fine or penalty.

The Ministry of Petroleum under the command of Minister Dharmendra Pradhan had told the Parliament that the government had issued a notice to RIL whereby a cumulative cost of $2.376 billion up to March 31 had been disallowed. “The ministry has also raised a claim of additional profit petroleum of $115 million to be paid by the contractor, on account of disallowance of cumulative contract costs of $1.797 billion, till 2012-13,” he had said.

According to the production sharing contract that is drawn between the Govt., & any private entity, a company and its partners can deduct all expenses from the sale of gas before sharing profits from this sale with the government. In this case, it applies to RIL’s partners – British Petroleum (BP) and Niko Resources. RIL has states that in 2012, the Govt. of Indiawrongfully sought to disallow cost recovery of investments made in the KG-DWN-98/3 block for 2010-11 and 2011-12. In a statement, the company said, “The potential impact to the contractor is the additional payment of profit petroleum to the government, when and if the disallowed cost is added to the profit petroleum.”

Reliance Industries have also states that it had commenced an arbitration process under the production sharing contract (with its partners BP & Niko) over the wrongful disallowance of cost recovery by the government in November 2011 and that the news item of disallowance of $579 Million related to 2013-14.


Independent Media Trust completes acquisition of control of Network18

July 8, 2014

Mumbai, July 7, 2014: Reliance Industries Limited (“RIL”) today announced that Independent Media Trust (“IMT”) of which RIL is the sole beneficiary, has completed the acquisition of control of Network 18 Media and Investments Limited (“NW18”) including its subsidiary TV18 Broadcast Limited (“TV18”).

Apart from nominees of IMT, Shri Deepak S Parekh and Shri Adil Zainulbhai have been inducted, as Independent Directors on the board of NW18. Mr. Raghav Bahl will continue to be on the Board of NW18 as a Non-executive Director.

With the completion of this transaction, IMT and RIL have become promoters of NW18 and TV18. The open offers to the public shareholders for acquisition of equity shares of NW18, TV18 and Infomedia Press Ltd. as announced on May 29, 2014 by IMT are in process and the Draft letter of offer has been filed with SEBI for its comments.

About RIL

Reliance Industries Limited (RIL) is India’s largest private sector company on all major financial parameters with a turnover of INR 401,302 crore (US$ 67.0 billion), cash profit of INR 30,795 crore (US$ 5.1 billion) and net profit of INR 21,984 crore (US$ 3.7 billion) as of March 31, 2014.

RIL is the first private sector company from India to feature in Fortune’s Global 500 list of ‘World’s Largest Corporations’ and currently ranks 107th in terms of revenues and 128th in terms of profits in 2013. RIL ranks 68th in the Financial Times’ FT Global 500 list of the world’s largest companies. RIL is ranked amongst the ’50 Most Innovative Companies – 2010′ in the World in a survey conducted by the US financial publication – Business Week in collaboration with the Boston Consulting Group (BCG). In 2010, BCG also ranked RIL as the second highest ‘Sustainable Value Creators’ for creating the most shareholder value over the decade in the world.

Key Contact:

Tushar Pania

Reliance Industries Ltd.

+91 9820088536