India's Reliance splits

Two brothers at the helm of India's largest private conglomerate, Reliance, have settled a long-running dispute that has transfixed the country, carving up their father's legacy in a deal announced by their mother.

    The deal marks parting of ways between Anil (L) and Mukesh

    The Ambani brothers will split the management of a business empire built by their father, just three years after his death, dividing control of a group with a vast shareholder base and revenues equivalent to more than 3% of India's economy.
     
    The deal between Anil and Mukesh Ambani followed months of acrimony that hogged the headlines. It was announced on Saturday by their homemaker mother Kokilaben, who was approached for help by the business-school-educated duo after their ownership and management row became public seven months ago.

    The flagship Reliance Industries
    Ltd will go to Mukesh Ambani

    It formalises a parting of ways for two of India's best-known business leaders, whose personalities are as distinct as Reliance's myriad interests.

    Kokilaben Ambani said in a statement that elder son Mukesh would run flagship Reliance Industries Ltd, with interests in petrochemicals, oil and gas exploration, refining and textiles, and Indian Petrochemicals Corp Ltd.

    Committee set up

    Anil will be responsible for utility Reliance Energy Ltd, financial services company Reliance Capital Ltd and Reliance Infocomm, a leading mobile phone operator that his brother has run since its launch in 2002.

    A Reliance Industries statement said the board had authorised a committee to suggest a suitable scheme of reorganisation.

    Anil Ambani said late on Saturday that he wished his brother all the best for the future and was confident Reliance Industries would scale greater heights under his leadership.

    "This is a new beginning for me. In the days and years ahead I am committed to creating value and adhering to the highest standards of governance," he said.

    "This is a new beginning for me. In the days and years ahead I am committed to creating value and adhering to the highest standards of governance"

    Anil Ambani,
    younger brother

    Mukesh has yet to make a formal comment.

    "All focus was so far on the issue of control," said Devesh Kumar, head of equities at ICICI Securities. "Now they should be able to focus on the future of the companies."

    But corporate lawyer HP Ranina said dividing the assets of the group, with $23 billion in revenue, would be a minefield of taxation and valuation issues.

    Reliance has had links with leading politicians, cutting across party lines. Just this week, a political row broke out following reports the ruling Congress party's president, Sonia Gandhi, had chartered a Reliance-owned jet to fly to Russia.

    The group, founded in 1958 as a commodity trader, is credited with nurturing India's capital markets when Reliance Industries floated in 1977, and it now has more than three million shareholders.

    SOURCE: Reuters


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