Settlement file on Ambani tables

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  • Published 8.03.05

Mumbai, March 8: A solution may finally be in sight to the battle between the Ambani brothers Mukesh and Anil over the ownership of the Rs 100,000-crore Reliance group.

It is learnt that K.V. Kamath, in his private capacity and not as the CEO of ICICI Bank, has submitted his final report to the two Ambani brothers on the valuation of the Reliance empire.

The two brothers have taken turns in the past few months to meet Kamath who, sources said, is also throwing up ideas on how to settle the dispute.

Kamath was aided by a retinue of chartered accountants and investment bankers to ascertain the value of the family assets which included the country?s largest private sector company.

The name of leading investment banker Nimesh Kampani of JM Morgan Stanley has been doing the rounds among investment banking circles. Both brothers realise that they have to adopt a ?give and take? policy, sources close to the Reliance group said.

The process of settlement will involve three key issues that the brothers have to surmount to reach an amicable settlement.

The buzz in the corporate grapevine was that a solution would be announced on February 24 ? the birthday of Kokilaben, Dhirubhai?s wife and matriarch of the Ambani clan. For some reason, that did not happen.

Both brothers have publicly stated that they will accept any formula arrived at by their mother.

Sources said the settlement of ownership will be a key issue in this process as the permutations and combinations of the two businesses will be worked out to determine who will get what from the Reliance group.

The settlement of management issues is the other hurdle the two brothers have to grapple with to ensure that Kamath?s valuation exercise is not wasted.

It will mean that some businesses, even if they are in one company, will be directly managed by one of the Ambani brothers.

The last knot that needs to be untangled relates to issues concerning operational freedom of the businesses.

This will be a very tricky issue for the brothers as both Mukesh and Anil are managing businesses that are inter-linked.

For example, the source said the energy business would need the gas discovered in the Krishna-Godavari basin whereas Reliance Infocomm will require the distribution infrastructure available with Reliance Energy.

The gas and the telecom businesses are managed thus far by Mukesh and his team while energy is part of Anil?s portfolio.

Kamath will probably find it far easier to unravel the complex web of investment companies that control pieces of the Reliance empire than deal with the next problem: to get the two brothers to forget the bitter past.