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Reliance settlement likely on July 6
June 15, 2005 12:26 IST
Last Updated: June 15, 2005 12:59 IST
An end to the bitter seven-month old battle between the Ambani brothers for the ownership of the Reliance business empire appeared imminent and an announcement about the settlement is likely to be made on July 6, the third death anniversary of their father and group founder chairman late Dhirubhai Ambani.
The Reliance 'ownership issue'
Reliance Industries Ltd chairman Mukesh and his younger brother and RIL vice chairman Anil met last week as part of efforts to hammer out a settlement, under which flagship company Reliance Industries and IPCL would be retained by Mukesh, while Anil would get Reliance Energy, Reliance Capital and Reliance Infocomm, sources in the know said on Wednesday.
Day-to-day talks are being held between the two sides to work out details, based on which a formal announcement could be made on July 6 to end the fiercest battle in the corporate history of India.
The settlement is based on the formula suggested by ICICI chairman and Ambani's family friend K V Kamath, who preferred IPCL and RIL going to one brother instead of splitting the companies.
Being keenly watched by the government, the settlement process had gained speed during the last one month, knowledgeable sources said.
As part of the speeding up progress, Kokilaben, widow of the founder chairman of Reliance Dhirubhai Ambani, is meeting the two brothers separately almost on a daily basis, they said.
Contrary to media reports about the confusion over who would get Reliance Capital, the sources indicated that the company operating in the market is set to go to Anil along with Reliance Energy and Reliance Infocomm, headed by Mukesh.
As per the broad understanding, new businesses of Reliance group that came into existence in the last few years would go to younger brother Anil while the parent company RIL and petrochemical venutre IPCL would be retained by Mukesh.
Possibilities of a merger between RIL and IPCL in future could also not be ruled out.
Keenly watching the progress on the largest corporate house in the country, finance minister P Chidambaram said last month that the two Ambani brothers were moving towards settlement and there was no need for any government intervention in the family dispute.
"Both Mukesh and Anil talk to me from time to time and I advise both to settle their dispute quickly. Looks like they will reach a settlement," said Chidambaram, who is understood to be apprised of the progress by Ambani siblings regularly.
Along with the finance ministry, the ministry of company affairs too has been keeping a tight watch on the developments, with sources saying that the two brothers have communicated to the government their willingness to put behind their past.
Kamath, who has been working on the evaluation and settlement formula, had broken his silence a few days ago saying that the brothers were matured and intelligent and would find a way out.
It is learnt that Kamath and Kokilaben had indicated to both Anil and Mukesh that they would like the process to be completed by June.
After the sharp attacks from Anil and his camp a few days before the crucial meeting of RIL board, including the younger sibling questioning the locus standi of a cousin and Mukesh camp follower Nikhil Meswani in family affairs, the two sides have virtually ended the proxy war through media and maintained silence.
Even as the negotiations are in full swing, movement of top executives within the group has already started. Some of the close lieutenants of Mukesh Ambani, including Manoj Modi, have already moved away from Reliance Infocomm.
Most of the executives who had opted to work with Mukesh Ambani, both in Delhi and Mumbai, have been absorbed in the parent company RIL's new oil and gas business, sources said.
The group's HR chief V B Bhatt had asked the top executives of Infocomm, including Manoj Modi, in April itself to make their choice clear on whether they would like to revert to the parent company or continue in their present position in case the company, headed by Mukesh, goes to Anil.
Along with this, RIL had provided a few weeks ago details of borrowings and other financial parameters to the younger Ambani to enable him in making an assessment of the company, sources said, adding that a broad evaluation of the companies by Anil's team is nearing completion.
In his report evaluating group companies and family assets, Kamath, aided by investment banker Nimesh Kampani of J M Morgan Stanley, is reported to have fixed a value of about Rs 25,000 crore (Rs 250 billion) for Infocomm and up to Rs 800 a share for RIL equity, an issue that dominated the negotiation process.