Mumbai, June 18: The battling Ambani brothers have finally reached a settlement that carves up the Rs 100,000-crore Reliance group created by their father Dhirubhai Ambani.
Matriarch Kokilaben Ambani hammered out the settlement between the two warring brothers, ending an acrimonious year-long battle between Mukesh and Anil.
After a marathon meeting between the sherpas and associates of the two brothers that started last night and ran on till 5 am at Sea Wind ' the family fortress in Cuffe Parade ' Kokilaben issued a statement at 8 am saying that she had “amicably resolved” all the issues between her two sons.
As a result, elder son Mukesh will have responsibility for Reliance Industries, the Rs 73,000-crore flagship of the Reliance group, and IPCL, a petrochemicals maker.
Younger scion Anil will manage the two service utilities ' Reliance Infocomm and Reliance Energy ' and the financial services arm Reliance Capital.
Later, the Reliance Industries board of directors met at Maker IV Chambers ' the Reliance base ' to discuss the implications of the deal.
Anil did not attend the meeting and chose instead to head to his office at Ballard Estate. He had submitted his resignation as vice-chairman and managing director of Reliance Industries and thereby severed a 21-year association with RIL. Sources said Anil did not attend the meeting because he had already tendered his resignation to the board last night.
It would have been an emotional moment for all as the articles of association of RIL during Dhirubhai Ambani’s lifetime had enshrined that the two brothers should continue as board members for life.
Nine of the 12 directors present at the board meeting accepted Anil’s resignation and recorded their appreciation of his invaluable services “to the growth of Reliance”.
The meeting chaired by Mukesh was ostensibly called to ratify the broad contours of a demerger plan. Y.P. Trivedi, M.P. Modi and D.V. Kapur, the three independent board members, were the three wise men nominated to consider the reorganisation of Reliance’s businesses.
“In the meeting, Mukesh appeared very sentimental,” said Y.P. Trivedi. The meeting was one of the shortest in the history of Reliance Industries, taking less than an hour as most of the deliberations were held during the past few days.
The markets had sensed that a Reliance settlement was imminent and punters pushed the Reliance share to over Rs 600 on Friday, the last trading day for the week.
After ratifying the proposal, the entire RIL board drove down to Sea Wind, a drive of less than 10 minutes, to meet the Ambani matriarch, Kokilaben. “We went to acknowledge her role in settling the differences and also to express our gratitude,” said Trivedi.
The Reliance settlement was welcomed by finance minister P. Chidambaram. He said there was no reason to proceed with any inquiry into the charges relating to corporate governance issues that Anil had levelled against Mukesh and the Reliance Industries board during the tumultuous seven months since the spat spilled out into the open.
Soon after the family conclave at Sea Wind, Mukesh and wife Nita headed to Goa where close associate Anand Jain’s daughter is due to marry next week. They will also be able to enjoy the sun and the surf and perhaps the first monsoon showers.
Anil, who now has to prove that he can independently run his own empire without financial support from Reliance Industries, is getting ready to attend to pressing business. On Sunday, he has convened board meetings of Reliance Energy and Reliance Capital to discuss fund-raising plans.
Emerging from his Ballard Estate office at 8.30 pm after a full day’s work, Anil told reporters: “I wish Mukesh the very best for the future. I am fortunate to enjoy the affection and support of thousands of employees of RIL which I take with me as I stand on the dawn of a new life'.
“This is a new beginning for me. In the days and years ahead, I shall commit myself to creating values and upholding strong corporate governance standards. Dhirubhai created something unique. I am proud to be able to carry his legacy in creating a strong Indian enterprise.”
There was a bit of irony in all the dramatic developments that enveloped the country’s largest private enterprise.
Jain, who was often referred to as the third son of Dhirubhai and whom Anil had blamed for all his troubles with brother Mukesh, resigned from the IPCL board. In January, Anil had stepped down from the IPCL board saying that he could not share a seat with Jain on the board of the company. No reasons were given for Jain’s resignation from IPCL ' a company that will go to Mukesh.