Siding with Reliance group chairman Mukesh Ambani, the board of the flagship company RIL [Get Quote] on Wednesday rejected objections raised by his younger brother and vice chairman Anil on financial accounts, appointment of directors and demand for termination of the ongoing buyback of shares.

Immediately after the board meeting, the company informed the stock exchanges that "while all other directors approved and signed the accounts at the meeting of the board of directors, Anil Ambani abstained from voting on the audited financial accounts and has not signed the same."

The Reliance 'ownership issue'

In its communication, the company further said "all other directors approved the re-appointment of H S Kohli and appointment of Ashok Misra. Anil Ambani dissented to the reappointment of Kohli and appointment of Misra to the board. The reappointment of H R Meswani was unanimous".

Informed sources said the board also turned down the suggestions of the younger Ambani, engaged in a battle with brother Mukesh over the control of Reliance empire, for "immediate termination" of the current buyback offer saying it was "inappropriate".

While the board passed over two dozen resolutions, including the report of its corporate governance committee, Anil was not supported on any of the issues raised by him by any director of the 11-member board.

Listing out a series of reasons for termination of the buyback programme, approved by RIL board at its meeting on December 27 with a provision of Rs 2990 crore (Rs 29.9 billion), Anil said despite the three-month old programme, RIL stock underperformed the BSE index by 6 per cent since November.

In his communication to the board at the meeting today, Anil objected to the programme on six counts saying "the failure to deploy a meaningful proportion of the approved buyback amount, despite the price being in the specified range, reflects poorly on the credibility of the management."

He also pointed out that foreign institutional investors had sold off more than two crore shares during the period, which was more than thrice the number of shares sold by retail small investors. "Thus, the buyback offer has only provided an exit opportunity to the large shareholders at the cost of small retail shareholders, whereas the objective was precisely the reverse."

Instead, he suggested that the board should decide to choose from the better options that he already had suggested while reminding that group's founder chairman and his late father had announced in RIL's AGM in 1997 that bonus to the shareholders would be issued every five years.

"The board should approve a liberal bonus for the benefit of more than two million shareholders of the company, either by free distribution of 12 per cent shares held in Petroleum Trust and other companies or by capitalisation of reserves," Anil said at the meeting.

Minutes before the board meeting, Anil had raised a number of issues and told reporters, "I have made suggestions in the past which the board has continued to ignore in terms of distributing the treasury stocks, issuing bonus shares, increasing the dividend since we are in a fundamental upcycle in both our oil and gas as well as petrochemical business."