28 December 2011

Warring Ambani Brothers bhai-bhai again?

If one started a sentence, the other would finish it. They were indeed a class act for people who knew them dearly. How does that kind of chemistry go wrong? A Chinese proverb goes, "Use power to curb power," and that's exactly what the estranged brothers did. Soon they bagged the title 'The feud Indian billionaire brothers' from international media and also became the national interest of India at one point of time. But as rightly said, 'Time mends all wounds,' the Ambani brothers are perhaps coming together again. Today, for the first time after fifteen long years, the brothers are to be seen celebrating late Dhirubhai Ambani's 80th birth anniversary.


Ambani Brothers
Kokilaben spoke to reporters in their home town of Dhirubhai Ambani Chorwad of Junagadh district, where both the brothers are expected to come for the opening of a memorial of their late industrialist father. "There are no differences or ill-feelings between Mukesh and Anil, both the brothers will come to Chorwad with their families tomorrow," Kokilaben said in response to a question on the reported differences between both the two according to a PTI report.

The founder of Reliance Industries, Dhirubhai Ambani passed away in 2002 after suffering a massive storke. The patriarch of the family had not left any will regarding the division of business and Mukesh Ambani for obvious reasons became Chairman and MD of Reliance Industries while his younger son, Anil Ambani was made the Vice-Chairman. But differences grew between the siblings and it was reported that Mukesh reportedly tried to oust Anil from the board. There were ownership issues between the two.

In 2005, Ambani brothers settled their dispute after their mother Kokilaben intervened and arranged a de-merger. Mukesh Ambani got Reliance Industries and IPCL, while Anil took control of Reliance Infocomm, Reliance Energy and Reliance Capital. The Bombay High Court also acknowledged the decision and approved the de-merger of Reliance Industries for the benefit of shareholders. But some shareholders were not happy with this and called the de-merger as more of a family bargain than a business severance. Thus began the battle for supremacy between the two.

 In 2006, Anil publicly questioned the gas supply agreement between Reliance Industries and Reliance Natural Resources at the time of split. Mukesh's company was reportedly going to sell gas to Anil's power company at a reduced rate, for which the government opposed. This made Anil suspect that Mukesh had some covert dealings with government bureaucrats. The year 2008 saw too many clashes between the brothers. Anil went to the extent of accusing the then Petroleum Minister, Murli Deora of secret dealings with his elder brother in 2008.


Mukesh Ambani
In 2008, Anil made another headline when he filed a $2.12 billion defamation suit against Mukesh for his remarks made on him in an interview with New York Times. June of 2008 Anil lost the deal with South Africa's multinational mobile telecomm company, MTN due to legal and regulatory issues. But Anil said that the loss was due to Mukesh's involvement. The coming years media had a field trip as Anil in 2009 addressed a letter to Indian Prime Minister Manmohan Singh in which he said: "Major power cuts, especially in north India, have become commonplace, causing grave hardship to hundreds of millions of consumers" sadly, all a result of RIL's corporate greed." He also asked that the oil ministry stay out of a commercial dispute between the companies according to Business Insider report. In July 2009, Mumbai High court gave a deadline of six weeks to sign the gas supply agreement.

They always say that younger siblings are the naughtier ones and Anil kept proving it through his innumerable acts against Mukesh. In August of 2009, Anil released daily ads criticizing his brother's company and the government alleging that the Indian government had taken Mukesh's side to raise the price of gas from Krishna Godavari basin. In August 2009, the brothers became a part of national interest when they saw their fights had affected the capital markets. Indian Finance Minister, Pranab Mukherjee requested the brothers to resolve their dispute privately. October 2009, both brothers go to Supreme Court over Gas dispute. In May 2010, the Supreme Court ruled in favor of Mukesh Ambani.

 To put an end to the never ending enmity between the brothers, Kokilaben brokered a peace treaty between them. Top notch officials from both the companies were asked to sign a draft of non-compete agreement which is contract law under which one person agrees not to pursue the same trade in competition against another person. In June 2010, Anil withdrew his defamation case.


Anil Ambani
The billionaire brothers decided to put an end to their rivalry and create a harmonious environment with co-operation and collaboration. Mukesh Ambani hatched a plan to combine his group with his younger brother Anil's telecom company to take another shot at the telecom sector for 4G services. "As leading telecom infrastructure and content service providers, we look forward to offering our services to RIL and other BWA players, even while we compete for customers in the market place through our choice of different technologies," RCom said in a statement. The result of this will be seen in 2012.

But is this the end to the 6 year contention? Will there be another face off? Sources close to India's richest man, Mukesh Ambani, have said that the billionaire intends to use the joint venture between his Reliance Industries, and American DE Shaw Group, to launch what is being dubbed The Bank of Ambani.
Anil's Reliance Capital already operates in the financial services sector, so if Reliance bank plans take off, the two could face-off again according to a Business Insider report.