The Telegraph
Since 1st March, 1999
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Trail leads to Mukesh, Nita
- Revelations about telecom control

Mumbai, Jan. 19: Investment companies controlling the Ambanis' telecom venture, Reliance Infocomm, have been traced directly to Mukesh Ambani and his wife Nita in fresh revelations.

Documents released today showed that four entities are the real owners of the nine companies that have a 40.5 per cent stake in Reliance Communications and Infrastructure Ltd, which is the holding company of the Mukesh-headed Reliance Infocomm.

Another 10 per cent is held by two funds ' Ganesh Infrastructure and Shankar Infrastructure Capital.

It is now revealed that Mukesh and Nita had acquired a 99 per cent stake in their own name in two of the four companies ' Lira Tradecom and Vivid Mercantile ' as recently as March 23, 2004. They informed the registrar of companies and other authorities about the deal two days later.

The couple invested Rs 99 lakh each to acquire the stake in Lira and Vivid. The ownership of the two others ' Imperial Mercantile and Stallion Commercial ' is not immediately known.

Anand Jain, close confidant of Mukesh, refused to respond to the revelations, saying that the Reliance Industries (RIL) spokesperson be contacted. The spokesperson was not available for comment.

As the battle between the brothers, Mukesh and Anil, rages, what is of relevance in the revelations is that Mukesh and Nita paid only Re 1 a share to pick up the stake in Lira and Vivid which are the powers behind the control of Reliance Communications.

On the contrary, parent company RIL had stumped up Rs 250 a share to acquire its holding in Reliance Communications in the same month in 2003.

The layered ownership structure means that Mukesh and Nita were able to pick up their stake in the eventual company ' Reliance Infocomm ' for a lot less than RIL.

Mukesh is also the chairman of RIL.

Lira and Vivid have a common director in A.V. Betkekar, a junior employee in the Reliance group. The revelations over the past two days show that Mukesh and his associates paid as little as Rs 101 crore for the 50.5 per cent stake, including the 10 per cent held by the two funds, in Reliance Communications while Reliance Industries paid Rs 2,331 crore for a 45 per cent holding.

Anil has been focusing on transparency and corporate governance issues to highlight how the shareholders of the flagship company, RIL, were given a raw deal through a share acquisition process that was loaded in favour of Mukesh and his associates.

Separately from the indirect holding through a maze of entities in Reliance Infocomm, Mukesh and associates also own 15.5 per cent in the company.

But then Mukesh has built up the company brick by brick.

Detractors, however, question if he could have done it without RIL shovelling enormous amounts of money into the venture.

The RIL board meets on Friday and the buzz is that there could be more disclosures before then.

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