The Hindu : Front Page : Reliance announces family settlement

Online edition of India's National Newspaper
Sunday, Jun 19, 2005

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Front Page

Reliance announces family settlement

Oommen A. Ninan

Ambanis' mother outlines broad framework

Anil Ambani,Kokilaben D. Ambani,Mukesh Ambani

MUMBAI: The long and bitter battle for control of the largest private corporate empire in the country, the Reliance Group, ended on Saturday with the Ambani brothers — Mukesh and Anil — agreeing to split the conglomerate.

The broad framework of the settlement was contained in a statement signed by Mrs. Kokilaben Ambani, the widow of the founder of the Reliance Group Dhirubhai Ambani and mother of Mukesh and Anil.

Mrs. Ambani said:

"With the blessings of Srinathji, I have today amicably resolved the issues between my sons, Mukesh and Anil, keeping in mind the proud legacy of my husband Dhirubhai Ambani. I am confident that both Mukesh and Anil will resolutely uphold the values of their father and work towards protecting and enhancing value for over 3 million shareholders of the Reliance Group, which has been the foundational principle on which my husband built India's largest private sector enterprise.

"Mukesh will have responsibility for Reliance Industries and IPCL while Anil will have responsibility for Reliance Infocomm, Reliance Energy and Reliance Capital. My husband's foresight and vision and the values he stood for combined with my blessings will guide them to scale new heights."

The statement came on the heels of the RIL's board meeting at which Mr. Anil Ambani's resignation from the position of Vice-Chairman and Managing Director of RIL was accepted.

The board decided to consider a proposal to reorganise the businesses as per "Kokila D Ambani's principle of ensuring the highest shareholders value." To do this, it decided to authorise the Corporate Governance and Stakeholders' Interface Committee to "examine in depth all the relevant issues including statutory and legal requirements and suggest a suitable scheme of reorganisation." It empowered the Committee to seek professional and legal expertise to prepare a scheme for reorganisation.

The board expressed its gratitude to Mrs. Ambani "for finding an amicable resolution in the overall interests of the company and its shareholders which will pave the way for preserving and taking forward the historic legacy of Dhirubhai Ambani, founder Chairman of the Company."

Market observers suggest that it will still take a few weeks before the details of the exact nature of the reorganisation are available. Mrs. Ambani's statement uses the phrase "will have responsibility for" while referring to the division of the companies. This, they point out, does not clarify the ownership structure within the group and between the two brothers.

`A new dawn'

PTI reports:

Terming the settlement as the ``dawn of my new life'', Mr. Anil Ambani wished his elder brother Mr. Mukesh Ambani ``the very best in future.''

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