Stepping up the attack on his elder brother Mukesh Ambani, Reliance Industries' [Get Quote] vice-chairman and managing director Anil Ambani on Thursday said shares of all group companies were "grossly under-valued" because of absence of corporate governance and lack of transparency.

The Reliance 'ownership issue'

A day after the stormy board meeting that witnessed a battle between the two brothers, Anil said "all Reliance group shares are hugely under-valued, considering strong performance and future growth potential."

"Substantial issues of absence of corporate governance, transparency, disclosure, related party transactions and minority investor treatment alone were responsible for RIL stock price under-performance," Anil said.

In an unprecedented move as a managing director of a mega company, Anil had on Wednesday refused to sign the final accounts of RIL at the company's Board meeting "owing to the absence of relevant information, details and disclosures," prompting a sharp reaction from Mukesh's camp.

Commenting on the response to the issues raised by him by the officials of RIL late last night, Anil, fighting a bitter battle with Mukesh over the control of Reliance empire, said "diversionary remarks by unnamed sources lack courage, character and moral fibre" and would not help find a solution.

Demanding that substantial issues raised by him needed to be "addressed", Anil said, "Dhirubhai Ambani's (group's founder chairman) and the interests of more than 20 lakh investors, are and will always remain paramount for me."

Rejecting all the suggestions and views of Anil, the RIL board had passed the financial accounts to announce a 47 per cent growth in net profit at Rs 7572 crore (Rs 75.72 billion) and backed Mukesh totally on appointment of Ashok Misra as independent director and extended the term of H S Kohli as executive director.

After the board meeting, Anil said through his spokesman that there was no disclosure on disposal of plant and machinery of nearly Rs 2,000 crore (Rs 20 billion) and reasons for increase in contingent liabilities by Rs 1,500 crore (Rs 15 billion).

Among the issues raised by him, included "related party transactions with Reliance Pharmaceuticals and Reliance Nutraceuticals -- whose details on ownership, financials and management were not known -- and in whose favour the effective ownership of a 23 per cent stake in IPCL [Get Quote] was transferred by Reliance Capital [Get Quote] of a value of over Rs 1,500 crore.

RIL Board also turned down Anil's demand for "immediate" termination of the ongoing buyback programme, with the company officials saying late last night that "all objections/dissent expressed by Anil Ambani were noted and taken on record and not rejected without any discussions.

"In fact, Anil Ambani was patiently heard by the board members," they said in response to the statement by Anil's spokesperson after the meeting. Anil, who had publicly opposed the buyback minutes before the RIL board meeting on December 27 that approved the move with a provision of Rs 2,999 crore (Rs 29.99 billion), said the company was apparently not serious in pursuing it and had spent less than 5 per cent or Rs 150 crore (Rs 1.5 billion) out of the stipulated amount for the purpose in over three months.

Instead, he demanded that RIL board consider rewarding the shareholders with a liberal bonus issue, that was long overdue but did not find a supporter in the board.

In their response, RIL officials said it was public knowledge that Anil Ambani had always opposed the buyback programme and asserted that RIL "has outperformed the Sensex by 8 per cent since the buyback announcement. This is in contrast to RIL's performance/underperformance of 5.2 per cent since November 17 (the day the feud between the two brothers became public) until the announcement of the buyback."