The Reliance affair may or may not be heading for closure. But the dispute between the Ambani brothers has led to disclosures that have shown up dealings, which in turn beg many questions -- and raise even more questions about the way Indian companies are run.

Let's start with the most obvious: Why would Reliance Industries [Get Quote] invest in Reliance Infocomm through a series of subsidiaries, and not directly?

The Reliance 'ownership issue'

Why would the telecom operations be conducted through companies that undergo a bizarre series of identity changes through name changes and mergers?

Equally, why would the investment companies that are declared to be "persons acting in concert" with the promoters, or their holding companies, go through changes of name and identity, if it were not to prevent their tracks from being followed, for whatever reason?

Again, why would Reliance Industries invest in the erstwhile Reliance Petroleum [Get Quote] through Reliance Ventures, which in turn invests through a series of investment firms whose shareholders remain secret, and who control funds that are 100,000 times their share capital?

And if it is true, as the company claims, that these investing firms can be made subsidiaries of Reliance Industries at any time, through the conversion of debentures, then why does the conversion not happen, and why are they left as firms owned by undisclosed people?

The fact is that extreme financial pyramiding, when the shareholders are not the same, raises doubts even more than questions.

There is a lack of transparency in all this that is very telling. With each intermediary company, the transactions become more opaque to the shareholders of the parent (listed) company, which is Reliance Industries.

Indeed, they also become opaque to the RIL board of directors, who (to take just one example) were not informed of Mukesh Ambani's sweat equity in Infocomm -- on the grounds that RIL was not directly involved and the transaction involved a subsidiary company.

Yet the money for the maze of transactions comes almost always from the listed company, which has millions of shareholders.

Surely, if Reliance Industries prides itself on its own role in the creation of a broad-based stock market in the country, and on its corporate governance standards (the company has won awards on this count, and has now set up a committee of directors to oversee them), it should re-examine this byzantine style of functioning and become more open and transparent to the investing public.

There are other issues of corporate governance that have emerged in the mud-slinging. If Anand Jain, who apparently has no executive position in the company, sits in judgement on Reliance pricing decisions and is at the same time related to many individuals or companies that have extensive business dealings with Reliance, there is the potential for a conflict of interest.

The counter-charge that Anil Ambani's in-laws have similar business dealings, raises the same questions. Shouldn't there be clear rules about who can have business dealings with the company, and who can't?

Finally, there is the business of treasury stock: shares of Reliance are held by others who are said to be acting in the interest of the general body of Reliance shareholders.

Yet these shares are shown in the "persons acting in concert" category along with the promoters' holding, and the company explanation that this was always the case does not make matters any clearer.

The entire body of Reliance shareholders cannot be "acting in concert" with the promoters; and if the stock is indeed held for the benefit of all shareholders, who so far have got something like a 1 per cent yield through dividend pay-outs, the trustees and others acting on behalf of the shareholders should logically offload the stock in bulk deals, whenever the pricing opportunity presents itself -- and distribute the proceeds to all shareholders (who by definition are financial and not strategic investors).

Will the company management commit itself to such a course of action?

To raise these questions is not to take sides in a battle between brothers, but to point out that if Corporate India is to be viewed through the prism that Reliance now presents, it is not a reassuring sight.