2002: Reliance founder Dhirubhai Ambani dies
2004: Feud between brothers becomes public
2005: Reliance empire officially split into two
Mukesh's share: Petrochemicals, Oil & Gas
Anil's share: Power, Telecom, Fin Services, Entertainment
Ambanis: Politics, drama, no happy ending?
It's the sort of family feud that, in the 80s, gifted Bollywood an entire sub-genre.
Only this one hit the national real-life box office in 2002, when the Patriach of India's most powerful business family died. What had been whispers of rivalry were suddenly deafening, shouted loudest and most often by the two heirs themselves. Anil and Mukesh Ambani were at war.
And in June 2005, the split was formal, with a demerger designed with the help of their mother, Kokilaben.
Mukesh got control of the flagship firm that held the petrochemicals and oil and gas businesses. Anil got Telecom, Power, Financial Services and Entertainment. But the settlement didn't end the bitterness.
The current battle is over gas that Mukesh's RIL extracts from the Krishna-Godavari Basin block off the coast of Andhra Pradesh. When Reliance originally struck gas here seven years ago, it was among the world's biggest gas finds, and Reliance was one big happy family.
After Dhirubhai Ambani's death, and the split wide open, the gas dispute rose to gigantic proportions. Under the demerger pact, Mukesh had agreed to supply a part of gas from this Krishna-Godavari basin field to Anil, for his Dadri power plant - at a price of 2.34 dollars per unit. But the government later approved a formula that valued the gas at a 44% higher price of 4.2 dollars. Mukesh wanted the higher price, unacceptable to Anil.
In a series of front-page newspaper advertisements, Anil slammed his brother and the government. Anil accused Mukesh's Reliance of inflating the costs of the project, of keeping the output artificially low, and of charging a high price to make super-normal profits. Both brothers took to hectic lobbying among politicians.
And so from boardrooms and courts, the battle spilled into Parliament. Petroleum Minister Murli Deora said, "We are not interested in the dispute between Ambani brothers, but we are interested in the gas that is a national asset."
But should Parliament be mediating a corporate battle at all? Interestingly, Anil Ambani, who first accused the government of batting for Mukesh, has quoted the Prime Minister in his attempt at reconciliation.
On Sunday, in a public note in which he speaks of his "love and affection" for his brother, Anil says, "The Prime Minister had wished that two brothers come together in national interest." Mukesh, rejecting that olive branch, has retaliated that this is a business battle, not a personal one.
With a combined net worth of over 31 billion dollars, the Ambani brothers have become a headache for the government. If it intervenes, it's accused of political bias. If it doesn't, the very public battle continues: one that many say is damaging India Inc's interests and image, both at home and abroad.
Anil says he loves Mukesh, wants peace
Following is the text of the statement issued by industrialist Anil Ambani seeking reconciliation with his elder brother Mukesh:
"In June 2005, with the blessings and approval of my respected mother Kokilaben Ambani, and in line with the vision and value creation philosophy of our beloved founder Chairman, Dhirubhai Ambani, we announced the restructuring of the Reliance Group.
I had sincerely believed then, that we had resolved all issues, and come to an amicable settlement that would create two of India's most dynamic business groups, bring peace and harmony to our family, and generate substantial wealth for millions of shareholders of the Reliance family.
Over the past 4 years, some parts of that promise have been realised. Unfortunately, the joy of that achievement has been tempered by the sorrow, pain and anguish of continuing disagreement and acrimony with my elder brother, Mukeshbhai.
Over these past 4 years, I have persevered with utmost sincerity, humility and good faith, and left no stone unturned to try and resolve our differences. To my lasting regret, despite all my well-meaning efforts, I have failed - pushing us even to the extreme step of recourse to litigation to protect the interests of over 11 million shareholders of our Group.
Over the past few weeks, many elder statesmen, trusted family members, and long-standing friends of my father, Dhirubhai Ambani, who have always had the best interests of the nation and the Ambani family at heart, have talked of the need to break the current impasse, and to find a solution that puts an end to this bitterness and rancor; and paves the way for substantial future growth and value creation for the country and millions of our shareholders. I agree with each one of them.
This has been a time of deep sadness and pain for me personally. Yet, throughout this very trying period, I have maintained the greatest of love, affection and respect for Mukeshbhai - as I have done since my birth.
In that spirit, I have made this pilgrimage today to the holy shrines of Kedarnath and Badrinath, in the hope of seeking divine inspiration and blessings, in trying to heal the wounds, and in making a renewed effort to resolve, reconcile and reciprocate.
I sincerely believe that Mukeshbhai and I can, even at this late stage, sort out all our disagreements, in a constructive, cordial and conciliatory manner, if we both commit to getting this done.
The issues are only a handful, and the facts are well known. My judgement says that they can all be resolved in a matter of weeks, and will not require several months of discussions.
Accordingly, with the blessings of my mother, and invoking the power of Lord Shiva from this most sacred of holy places, I am once again reaching out to Mukeshbhai - and hope and pray that my feelings will be reciprocated, and we will arrive at a solution to all outstanding issues, with a generous heart, a willing mind, and an accommodating spirit.
There can be no better gift to my mother, Kokilaben Ambani in her 75th year, and to the legacy of our beloved father, Dhirubhai Ambani, the proud creator of the Reliance Group."
Mukesh rejects Anil's olive branch
Anil Ambani's conduct so far makes it difficult for Reliance Industries Limited (RIL) to believe that he has had a real change of heart.
Mukesh Ambani's company issued a statement to this effect on Sunday, in response to what is being called Anil's olive branch to his elder brother. In a surprise move hours before, Anil had reached out to his estranged brother saying all disagreements can be sorted out in a cordial and conciliatory manner.
But RIL's response said that "issues in the dispute can only be decisively resolved by a decision of the highest court."
It added, "The dispute under litigation is not merely a family matter, as Anil Ambani's statement tries to make out to be. Vital national interests, including government's revenue from the natural gas, are at stake."
Anil had called for renewed efforts to end all disputes with brother Mukesh, on his return from a pilgrimage to Kedarnath and Badrinath on the eve of Diwali.
But RIL's statement claims that just 24 hours before seeking peace, Anil's company filed an affidavit in court accusing Mukesh of criminal breach of trust. "For last many years, Anil Ambani has indulged in a malicious campaign against RIL and its chairman," the RIL response said.
The two brothers are engaged in a bitter court battle over allocation of gas and the Supreme Court will commence hearing of the case from October 20.
It may be recalled that Prime Minister Manmohan Singh had earlier wished that the two brothers come together in the larger national interest and similar sentiments were echoed by Finance Minister Pranab Mukherjee and other senior government functionaries.
