Reliance the settlement and way forward
20 June 2005
The ownership issues at Reliance seem to have come to an end. What can investors expect from the settlement? Have all the issues been addressed? And finally, which of the brothers will be more successful in the long term?
The nation woke up on Saturday to the news of an amicable settlement to the Reliance family feud, a dispute which had captivated the nation and kept its over 3 million shareholders on tenterhooks. The quarrel between brothers Mukesh and Anil, the late founder's sons and heirs, for control over India's largest industrial group had led to under-performance of group stocks even as the stock markets tested new highs over the last one year.
The patch up was confirmed by a letter from family matriarch Kokilaben D Ambani to the media, in which she assigned 'responsibilities' of various businesses to the two brothers. Elder brother Mukesh would handle Reliance Industries and IPCL; and Anil would handle Reliance Infocomm, Reliance Energy and Reliance Capital.
The board of directors of Reliance Industries met on the same day and authorised a group of independent directors to deliberate on the restructuring of various businesses of the company and come up with a formal proposal which would satisfy all legal requirements.
Anil Ambani resigned as vice-chairman and managing director of Reliance Industries and over the weekend took over as the chairman of Reliance Energy. He also made a slew of announcements regarding the business plans of Reliance Energy and Reliance Capital.
Most noteworthy was the announcement of his own umbrella group, Anil Dhirubhai Ambani Enterprises, comprising Reliance Energy, Reliance Capital and Reliance Infocomm.