Feud Between Mukesh Ambani And Anil Ambani
Dhirubhai Ambani, founder of the Reliance business empire, dies in July 2002. Mukesh becomes chairman and managing director of Reliance Industries, and Anil becomes vice-chairman and managing director.Mukesh and Anil did not get along very well even when Reliance group founder Dhirubhai Ambani was alive.Their Feud becomes public in November 2004.
In June 2005, the family reaches a settlement to split the Reliance business in a deal announced by their homemaker mother Kokilaben. The formal split happens in 2006. Mukesh gets the flagship Reliance Industries, with interests in petrochemicals, oil and gas exploration, refining and textiles. He has since launched a retail venture. Anil gets telecoms, power, entertainment and financial services businesses. The Anil Dhirubhai Ambani Group (ADAG) now includes Reliance Communications Ltd, Reliance Infrastructure Ltd, Reliance Capital Ltd, Reliance Natural Resources Ltd and Reliance Power Ltd.
Initial idea was that allow the brothers to keep the business(es) they were handling. Anil did not agree. On request from Kokilaben, Mr Kamath of ICICI became the advisor. Mukesh was deep into Petrochemical business and he was managing it well. Anil was managing finance. So it became apparent that Mukesh would get Petro chemicals and Anil would keep finance and energy business.
Mukesh Ambani Outperforms
Mukesh Ambani’s flagship RIL has outperformed his younger brothers’ businesses on profitability and returns since the split. Its revenue and profit rose at an annualised rate of 11.2 percent and 9.5 percent, respectively. Shares of the company have given an annualised return of 16.5 percent, taking its market value to a record Rs 6 lakh crore. Anil Ambani’s group companies have lagged. While Reliance Capital Ltd.’s revenue rose at a higher annualised rate of 23.3 percent since listing, profits rose at a compounded annual rate of 4.4 percent. Reliance Infrastructure’s profit rose at 5.5 percent, while its share price rose at a 2.4 percent annualised rate. His telecom business is already making losses with shares hitting an all-time low.
http://www.bloombergquint.com 23 November 2017 By Yatin Mota And Soumeet Sarkar
Sheela Bhatt | December 21, 2004