California State Teachers Retirement Fund to Vote Against Aramco Chairman Yasir Othman Al Rumayyan for Reliance Board of Directors

The pension fund, which has assets worth more than $ 318 billion, owns about 53.07 lakh of fully and partially paid shares of Reliance Industries, according to its website.

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Posted on 09.25.21, 01:47 AM

The first sign of shareholder revolt was raised at Reliance Industries.

The California State Teachers Retirement Fund (CalSTRS) – one of the world’s largest institutional investors – has decided to vote against the appointment of Saudi Aramco chairman Yasir Othman Al Rumayyan as an independent director on the board. from the oil and gas giant.

The pension fund, with assets of over $ 318 billion, owns around 53.07 lakh of fully and partially paid shares of RIL according to the latest information available on its website.

This is a tiny fraction of overall equity – only 0.07 percent – but the decision has a very important implication since it is the first time that someone has consciously decided to vote against a resolution sponsored by the direction.

The CalSTRS site said the institutional fund would vote against Rumayyan’s nomination. However, he did not give reasons for this decision.

A BloombergQuint report says the fund decided to vote against the resolution based on the recommendation of global proxy advisory firm Glass, Lewis & Co, which has raised concerns over the designation of Al- Rumayyan as an independent director.

The proxy consulting firm reportedly said that Al-Rumayyan was governor of the Public Investment Fund, the Saudi government’s sovereign wealth fund, and would also advise the general secretariat of the cabinet of ministers of Saudi Aramco.

He added that given his ties to the Saudi government and the proposed business relationship between Saudi Aramco and RIL and, in the absence of a clear disclosure on how he is considered independent, he will classify him as not being independent at this stage. of time.

RIL shares closed at Rs 2,482.95 on Friday, a marginal decline of 0.27% from the last close.

Saudi Aramco is expected to take a 20% stake in RIL’s petroleum-chemical (O2C) business, which it aims to divest once it receives regulatory approvals.

Aramco reportedly offered to seal the $ 25 billion deal with a mix of cash and its shares that could see RIL offered a 1% stake in the Saudi entity and the rest in the form of payments. in cash in installments.

While RIL shareholders have already approved the spin-off of the O2C business, it is now pending with the National Company Law Tribunal (NCLT).

RIL has retained the services of KFin Technologies Pvt Ltd, Registrar and Transfer Agent, to provide a remote electronic voting service to its members. In his postal vote, RIL said that given Al Rumayyan’s extensive knowledge and experience in the petroleum and refining industry, his understanding and position in the geopolitics of petroleum and global finance as well as training, the proposed appointment is in the best interests of the company.

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