Nita Ambani joins EIH as additional director

East India Hotels, which runs the Oberoi Hotels chain, inducted Nita Ambani, wife of Reliance Industries chairman Mukesh Ambani on its board, on Monday, paving the way for her to attend corporate board meetings.

Ever since RIL bought a 14.9 % stake in EIH in August 2010, there were hushed talks which suggested that it was a matter of time before Nita Ambani joined the EIH board. Mukesh Ambani had then entered as a white knight buying a 14.12% stake in EIH for Rs 1021 crore, to help the Oberois thwart a possible hostile bid by ITC, which also has a 14.98% stake in EIH and is seen as a serious business rival of ITC as per a report in TOI by Piyush Pandey.

Despite the overwhelming presence of such large corporate groups in EIH, the promoters, who have around 34% in the company are not worried. In a recent interview to TOI, EIH chairman, P R S Oberoi had described the Ambanis as friends and had said that he had no problems offering Ambani a position on the board.

Also joining Ambani on the EIH board is Manoj Modi, a childhood friend of Mukesh Ambani and his top lieutenant, who is helping senior Ambani in shaping RIL's retail dreams and new business initiatives. Confirming the move, an EIH spokesperson told TOI, "Nita Ambani, Manoj Modi, Renu Sud Karnad and Robert Henry Burns have joined the EIH board as additional members. There is no change in RIL's stake in EIH, which remains at 14.8%."

Nita Ambani and Manoj Modi have joined the EIH board as non-executive non-independent directors since RIL has a holding of 14.8% stake in EIH while Renu Sud Karnad of HDFC and Robert Henry Burns, founder of Regent International Hotels have joined EIH in the capacity of non-executive independent directors. All the four new members of the board are designated at additional directors.

RIL's investment in EIH has been seen as RIL's big bang foray into the hospitality business and P S R Oberoi, EIH chairman popularly known as Biki has already announced plans to jointly develop luxury hotel projects with RIL. The senior Ambani is already building a hotel in Kenya along with Jaydev Mody of Delta Corp.

Investment advisor S P Tulsian believes that RIL has big plans for the hospitality sector. "I personally feel that going forward RIL will increase its holding in EIH. Mukesh Ambani may strike a deal with Y C Deveshwar to buy out ITC's 14% stake in EIH. Nobody is so generous and liberal to give two board seats to RIL. I see it as commercial transaction and RIL's future investments in the hospitality space may come through EIH," said Tulsian.

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