The Hindu Business Line : Accord at Reliance<br>Mukesh gets oil, petrochem; telecom, energy for Anil

The Rs 90,000-crore empire established by late Dhirubhai Ambani over 25 years will be divided between his two sons — Mukesh and Anil — in a deal chalked out by their mother, Kokilaben Ambani. In a statement to the media, Ms Ambani said that Mr Mukesh will have the responsibility for Reliance Industries Ltd (RIL) and IPCL while the younger son, Mr Anil, will be in charge of Reliance Infocomm, Reliance Energy and Reliance Capital.

"With the blessings of Srinathji, I have today amicably resolved the issues between my two sons, Mukesh and Anil, keeping in mind the proud legacy of my husband, Dhirubhai Ambani," she said in the statement that was issued along with a Reliance group press release.

"It shows the maturity of the brothers to carry on the legacy of their father," Mr K.V. Kamath, CEO & Managing Director, ICICI Bank, said. He had a cryptic "no comment" to all other questions. Mr Kamath had been widely reported as close to the settlement process.

Observers believe that matters pertaining to the cross-holdings within the group — which involves personal wealth transfer — may have been addressed as, without that, a public announcement of de-merger carries little merit.

The bitter differences over ownership of Reliance group companies had first surfaced in November 2004. The disagreements were played out in the media. July 6 was purportedly the date of settlement between the brothers, but indications of an earlier settlement had kept the media on its toes on Friday. The first of the press statements on an `amicable' settlement was despatched on Saturday morning when the RIL board met.

The board recorded its appreciation for "the sincere and painstaking efforts taken by Smt Kokilaben Ambani in working towards the settlement that will further enhance the value of the Reliance group." It also expressed its gratitude to Ms Ambani for finding an amicable resolution "in the overall interests of the company and its shareholders."

Ms Ambani said she was confident that both Mukesh and Anil would work towards protecting and enhancing value for over 3 million shareholders of the Reliance Group. Mr Anil Ambani today resigned as RIL's Vice-Chairman and Managing Director and also as a Director of the Rs 73,164-crore company. The board accepted his resignation and recorded its appreciation for the "invaluable services" of the younger Ambani.

RIL's board also decided to consider a proposal to reorganise the businesses as per Ms Ambani's "principle of ensuring the highest shareholders value."

It has authorised the Corporate Governance and Stakeholders' Interface Committee to examine all relevant issues, including statutory and legal requirements, and suggest a scheme of reorganisation. "In this task, the board further empowered the committee to avail itself of professional and legal expertise to advise on preparing the reorganisation scheme expeditiously," RIL said in a release.

The boards of Reliance Energy and Reliance Capital Ltd are scheduled to meet on Sunday to consider proposals to raise long-term resources by issue of equity related securities.

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