Flashback

19 NOVEMBER, 2004

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Mukesh admits to ownership issues

Seemingly innocuous statement to a TV channels blows the lid off family feud

The big bang story broke with a whimper when Mukesh Ambani told a business news channel in a most innocuous fashion of "ownership issues" in Reliance.

At last, the rumours that had been simmering just benath the surface received the stampt of approval from the most "highly placed source" imaginable.

Business Standard lost no time in acknowledging it as what it was: the biggest family feud ever in the biggest family-owned company.

Even the proverbial bored housewife began to pick up this paper, which managed to elbow out the saas-bahu serials just a little in the mindspace game, and debate whether the late Dhirubhai Ambani and indeed left a will.

Finally, it turned out to be exactly what BS had reported at the very outset, that the pat riarch had died intestate on July 7, 2002.

22 NOVEMBER, 2004

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Anil says his powers have been diluted

Mukesh given sole responsibility of all financial and investment decisions

Early on, BS predicted that there would be no quick solution to the dispute. The scepticism arose from Mukesh's attempts to sideline Anil.

In the company's last board meeting, the report revealed, Reliance's directors gave Mukesh the sole responsibility for all financial and investment decisions. Hitherto, Anil was seen as the company's financial brain and fund-raiser.

Besides, Mukesh had also postponed by two years the supply of gas to Reliance Energy, controlled by Anil, whose plans to rapidly expand the company would have to be put on hold.

Sources told BS that Anil had conveyed to his mother that he will accept whatever she prescribed. But no meeting had been arranged between the brothers.

23 NOVEMBER, 2004

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Dhirubhai settled ownership: Mukesh

But it is not clear whether his statement enjoys the backing of the family

In a defensive move, Mukesh clarifies his statement to the television channel, saying it was torn out of context. In a statement that Dhirubhai "had settled all ownership issues pertaining to Reliance within his lifetime".

There was no indication whether the statement had the backing of Anil or any of the other family members. It appeared a one-way move as BS sources said that no family meeting had taken place before it was issued.

24 NOVEMBER, 2004

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Mukesh says the final word is CMD's

Email to the group's employees seeks to emphasise control over the group

Soon after the clarification, Mukesh went on the most concerted offensive yet.

In an email to some 80,000 employees of the Reliance group, he said: "There is no ambiguity in his (Dhirubhai's) legacy that the chairman and managing director is the final authority on all matters concerning Reliance... There is no question of any effect on the integrity of Reliance."

He urged the employees to "go beyond issues that are distorted out of contet and continue to work diligently and purposefully as you have always done before."

He added: "No comment from any quarter of the media or society can take away the performance that the 80,000 strong employees of Reliance have delivered and won worldwide acclaim."

29 NOVEMBER, 2004

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I am a professional in IPCL, says Anil

Email to Reliance Energy's employees says Anil has no personal shareholding

Firing the return salvo in the email war (making this perhaps the first business feud to be fought, in large parts, electronically), Anil sends an email to Reliance Energy's 25,000 employees saying sauomg tjat je was working in the company as a professional and had no personal shareholding in it.

He also requested the six directors of the company who had resiged earlier without giving a reason to continue to serve the company.

The next day, BS reported how for two weeks in Kukaswada, a tiny hamlet in the Junagadh district of Gujarat, the Shantilal Masrani, his wife Jaswantiben and their neighbours had been praying for truce between the Ambani brothers in the same one-room where Dhirubhai was born.

The Masrani couple, whose family had bought the house from Dhirubhai's father, is childless and considers Anil and Mukesh its children.

21 DECEMBER, 2004

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Amitabh Jhunjhunwala resigns as RIL treasurer, quits Reliance Energy too

Widely seen as Anil Ambani's financial advisor, Jhunjhunwala exits the two companies but there is no public acrimony

RIL treasurer Amitabh Jhunjhunwala resigned. Widely seen as Anil's financial advisor, he also resigned from the Reliance Energy board, on which he was an RIL nominee.

In his letter to RIL chairman and managign director Mukesh Ambani, Jhunjhunwala is understood to have cited several reasons for his resignation, but largely stayed away from any public acrimony. Jhunjhunwala had been with RIL for 12 years and its treasurer since 2002.

24 DECEMBER, 2004

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Move seen as attempt to thwart Anil's plan

Mukesh heads off campaign against him over the 12 per cent sweat equity issue

Thus far, Mukesh was seen as a man out to corner as much of the family business as possible for himself by marginalising his brother. By giving up the 12 per cent equity of Reliance Infocomm that had come to him as sweat equity, he changed that perception to an extent.

"There has been a sustained campaign against him on the issue of the acquisition of sweat equity in Reliance Infocomm. Against this backdrop, Mukesh Ambani has sought to renounce the sweat shares," a Reliance Industries spokesperson said.

BS pointed out how the move was designed to take the wind out of Anil's sails. The younger brothers had intended to bring the sweat equity and other Reliance Infocomm issues to the Reliance Industries board.

28 DECEMBER, 2004

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Board backs Mukesh, Anil dissents on several items

Both sides claim victory after a meeting of RIL's board, Anil abstains on buyback

Mukesh's side said the board had stood solidly behind him. "The board reaffirmed that all Reliance group companies should get approval from Reliance Industries for any big project," said a company statement.

Anil absained from the buyback proposal, which ended up being passed by the board. However, he did achieve a few things. A corporate governance board was set up. Sebi took note of Anil's charges.

RIL said it will continue to provide "reasonable assistance" (read gas supply) to Reliance Energy. Besides, he raised the intellectual quotient of the battle by quoting from the Art of War by Chinese philospher Sun Tzu that the object of war is to make peace.

BS reported how only the brothers had done all the talking at the board meeting. The others were generally silent.

4 JANUARY, 2005

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Anil Ambani resigns from IPCL's board

Anand Jain comes centrestage as Anil trains guns on Mukesh's confidant

The new year brought a new player centrestage. Anil resinged from the board of IPCL, refusing to be on the same board as Anand Jain, a confidant of Mukesh.

In a letter to Mukesh, IPCL's chairman, Anil named Jain no less than eight times, saying that Jain was "leading a conspiracy to divided both of us and to further aggravate the differences".

He also claimed that Jain' dealings with Rliance Industries "are improper and contrary to ethical values and have impacted the business image and reputation of our company". Later on, in May, Anil trained his guns on Nikhil Meswani, a cousin close to Mukesh.

17 JUNE, 2005

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Settlement on anvil: Anil to get Infocomm, Energy and Capital

A holding company to be set up to avoid tax issues and ensure easy listing

BS reported that a settlement was just round the corner under a holding firm will be crated and Reliance Infocomm, Reliance Energy and Reliance Capital would go to Anil. The new structure will do away with any tax implications and the new holding company can get automatically listed.

Just 24 hours later, Kokilaben announces a settlement in Mumbai, under which Anil gets the three companies mentioned above.

The statement is more about blessings, vision and values than company structure. BS brings out a special edition on a Sunday to bring you all the news and insight.