P. Chidambaram, India?s finance minister, on Friday urged Mukesh and Anil Ambani, the feuding brothers who own Reliance Industries, India?s largest private sector company, to settle ?their differences within the [family?s] four walls?.
Mr Chidambaram?s advice follows a request earlier this month by the Securities and Exchange Board of India, the country?s main stock market regulator, for Reliance to hand over key documents related to its system of corporate governance.
But people close to the family say the feud, which came into the open last November when Mukesh, chairman of RIL and elder brother, said there was ?ownership issues?, is likely to be settled by their mother, Kokilaben. The brothers apparently agreed at a family meeting 10 days ago to abide by any decision their mother reached. Their father, Dhirubhai, died intestate in 2002.
Anil Ambani, who claims that he has been frozen out of control and decision-making in all but a couple of small subsidiaries of the group, alleges his brother has flouted standard rules of corporate governance. The family owns 34 per cent of the $17bn company, which is India?s leading petrochemicals and telecoms player.
Friday?s comments by Mr Chidambaram imply that a failure to settle the ownership question within the family could lead to a more robust intervention by the regulators.
?We all know there are differences between the two brothers,? said Mr Chidambaram. ?I would request them to settle these differences within the four walls of their residence.?
But valuing the family?s stake in Reliance, in which foreign investors have a 31 per cent stake, could prove timely and controversial, even before their mother recommends a settlement. V. Kamath, a close friend of the family and the chairman of ICICI Bank, India?s largest private bank, has been entrusted with the task of assessing more than 200 separate ?promoter? companies that vote on behalf of the family.
The elaborate ownership network, which was set up by Dhirubhai in the 1980s and 1990s to get around some of India?s complex regulatory and tax requirements, is effectively controlled by Mukesh. Any final settlement would also be complicated by Anil?s demand on the removal of Anand Jain, a close friend of Mukesh, who sits on the board of some of the Reliance subsidiaries.
Close observers say it is likely the mother will try to keep Reliance in one piece while giving formal legal ownership rights to both of the brothers.
?This will take weeks and weeks and there is no guarantee both of the brothers will agree to what their mother recommends,? said one company official. ?But it is a step forward from a few weeks ago when the brothers could barely talk to each other.?