Reliance Industries mulls HQ shift to Jamnagar
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Posted On :
Feb-11-2010
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Article Word Count :
478
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Reliance Industries (RIL), the nation’s biggest company, is contemplating shifting its registered office to Jamnagar in Gujarat from Mumbai, which will ease the city’s administrative burden. A possible move to Gujarat, which is one of the most-favoured destinations of businessmen was discussed at the RIL board meeting on January 22 “informally”, a person familiar with the development said.
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MUMBAI: Reliance Industries (RIL), the nation’s biggest company, is contemplating shifting its registered office to Jamnagar in Gujarat from Mumbai, which will ease the city’s administrative burden.
A possible move to Gujarat, which is one of the most-favoured destinations of businessmen, including Ratan Tata, was discussed at the RIL board meeting on January 22 “informally”, a person familiar with the development said. It is not known when a decision would be taken on it. Reliance Industries declined any comment.
Mumbai, the hub of commerce since the British days, has been losing sheen, as services sectors such as technology and telecom begun to get bigger in the national economy, while manufacturing industries such as textiles got crippled. Soaring real estate prices and infrastructure bottlenecks are making the capital of Maharashtra unattractive.
Reliance Industries Ltd’s internal debate about shifting of the registered office may not be because of the one upmanship between political parties or the administrative burden on Mumbai, but the need to have key staff closer to its 60-million tonne refineries, the largest single-location facilities in the world.
If it happens, it may not be the first time. Mukesh Ambani’s RIL had twice formed Reliance Petroleum with registered offices in Jamnagar to build refineries, which were later merged with RIL.
“Generally speaking, a company has to file its tax return either in the jurisdiction of its registered office or at the place where the dominance business is located,” said Sudhir Kapadia, partner, KPMG. “Many companies find it administratively convenient to get assessed on their taxable income at the main manufacturing centre, since the information may be available at that place.”
But Mr Mukesh Ambani’s Reliance may well retain their corporate offices in the prestigious Nariman Point of Mumbai. While top executives are located in the Maker Chambers-IV, its offices are spread all over, unlike a single building for companies such as Essar. Any move to Jamnagar could displace some of its 5,000-odd staff in Mumbai. It employs about 25,000 people.
Probably, some of the Reliance Industries staff could prefer to move to a city like Jamnagar, as the company may create infrastructure for a luxurious life, improving the quality of life for employees unlike a mostly-wretched one in Mumbai for the salaried middle-class who jostle for space in trains and even on platforms. Companies are preferring other cities with better infrastructure such as New Delhi which boasts of a swanky Metro and wide roads.
Around 44,000 new companies were registered in the NCR in the first nine months of the financial year, four times that of Maharashtra, according to data from the Registrar of Companies. In legitimately reducing the burden on Mumbai’s infrastructure and administration it may also be a boon for property owners in the remote city, as any such move could trigger a surge in real estate prices.
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Article Source :
http://www.articleseen.com/Article_Reliance Industries mulls HQ shift to Jamnagar_10802.aspx
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Author Resource :
Mukesh Ambani’s Reliance Industries, the flagship company of the Reliance Group, may shift its headquarters to Jamnagar.
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Keywords :
Reliance, Reliance Industries, Reliance Group, RIL,
Category :
Business
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Business
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