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No headway as Ambanis harden stand
Palakunnathu G Mathai & Kausik Datta in Mumbai | December 13, 2004 09:01 IST
The public spat between the Ambani brothers moved no closer to a resolution on Sunday with the issue not having been discussed when they met their mother, Kokilaben, separately, sources in Mumbai said.
But Reliance Industries chairman Mukesh Ambani (who has declared that he wants his brother out of Reliance Industries) seems to have raised his offer to Reliance Industries vice-chairman Anil Ambani.
The younger Ambani, however, is adamant about staying on in Reliance Industries, though he may agree to a reduced turf, according to a source close to him.
Exactly by how much Mukesh Ambani has raised his earlier offer to his brother is not clear but a senior Reliance group executive said: "MDA (Mukesh D Ambani) is keen to revise the previous offer. However, I cannot tell you the revised amount because Kokilaben is the final authority and will come out with a judgment. It's not fair on my part to mention a sum."
Mukesh Ambani has publicly said that he would leave it to his mother to decide on a settlement of the dispute. He is understood to have earlier offered his brother control of Reliance Energy, Reliance Capital and Rs 10,000 crore (Rs 100 billion) to buy Reliance Industries' equity in both companies, an offer that Anil Ambani is said to have spurned. The Reliance group executive's statement suggests that this sum has now been raised.
But a source close to Anil Ambani said that no new significant offer had been made and that over the past few days Mukesh Ambani had been offering more cash, apart from control of Reliance Energy and Reliance Capital.
Significantly, the source also said that Mukesh Ambani had offered some days ago to buy out his brother from Reliance Industries, by paying him for half the Ambani family's stake in Reliance Industries, that is, roughly 17 per cent.
At current market prices, that would work out almost Rs 12,000 crore (Rs 120 billion). Executives close to Mukesh Ambani were not available for comment on this in the evening.
"Anil Ambani is not for sale," the source close to him said. The younger Ambani's position is that Mukesh Ambani must first prove to his brother that their father, the late Dhirubhai Ambani, left everything to Mukesh Ambani.
"All these offers are irrelevant. Anil Ambani had promised his mother and father (when he was alive) that he would never leave Reliance Industries. His mother doesn't want Anil to leave Reliance Industries," the source claimed.
What Anil Ambani might consider is a 60:40 or 70:30 restructuring of the family business, including Reliance, the source said, while continuing to stay on in Reliance Industries.
That implies that Anil Ambani would settle for overseeing, say, the Reliance group's energy business, including the oil and gas fields, while leaving the refinery and petrochemicals businesses to Mukesh Ambani to run.
Meanwhile, the executive close to Mukesh Ambani told Business Standard in the morning before the brothers met their mother that Kokilaben would probably meet the brothers separately.
"The situation has come to such a pass that MDA is in no mood to talk to ADA directly."
He explained that Mukesh Ambani had requested his mother to intervene in the dispute because Anil Ambani had been talking indirectly through the press ("his men are feeding the press") and so was not sure whether what appeared in print was authentic.
"There is every possibility that the press is adding something to what the Anil Ambani side says. Therefore, MDA wants to be sure about ADA's position."
He said that Mukesh Ambani wanted to settle the matter amicably and would never move the courts. He said that Kokilaben was unlikely to divide the responsibility for running Reliance Industries between the two brothers, though he added that she had every right to do whatever she thought was correct.
Clearly, both Ambani brothers have arrived at irreconcilable positions.