Reliance "Ownership Issues"

[Puneet 0]

A poor, ill-educated man created 20 billion dollar Reliance industry.

Two business graduates from Stanford etc, busy breaking it up.

That 's education.

25429[/snapback]

There is a difference between education and qualifcation.

Dhirubhai Ambani - ill-qualified, yes he was but ill-educated, certainly not.

Though, education and qualifiaction are often synonymous and a highly qualified person is often assumed to be highly educated too. But there are cases where a ill-qualified person is highly educated. A classical case from history is that of Akbar. He never had any formal education (meaning he was not qualified) but he was a highly educated person of his times.

[deepu 0]

3 new Infocomm investors surface

BS Corporate Bureau in Mumbai | January 28, 2005 09:25 IST

Three new investors have surfaced in Reliance Infocomm, according to documents made available on Thursday evening.

These are the only investors with no obvious link to the Reliance group; all three investors are Delhi-based and got Rs 1 crore (Rs 10 million) of Infocomm stock at face value in September 2002, three months before the company launched operations.

The investors are Fairever Traders and Consultants, Softnet Traders and Consultants, and Prerna Auto. In all cases, the owners of the shareholding companies are a husband and wife who invested either Rs 400,000 or Rs 500,000 in equity stock.

In a clear pattern, the three companies issued redeemable preference shares of Rs 35 lakh (Rs 3.5 million) each, with these shares being picked up by a variety of finance companies located at different places in Delhi. The money was used to buy Infocomm stock {either Rs 33 lakh (Rs 3.3 million) or Rs 34 lakh (Rs 3.4 million) in each case}.

All three companies were formed on the same day (16 September), and the equity as well as preference shares were also issued on the same day. The investment in Reliance Infocomm was also made on the same day.

The information relating to these investments became available late in the evening, and it was not possible to check on who exactly these shareholders are, and why they were given Infocomm shares at face value at that stage in the company's history.

From Infocomm's point of view, the money invested by these firms was not significant because Infocomm already had an equity base of Rs 415 crore (Rs 4.15 billion), plus substantial other funding in a variety of ways, running into thousands of crore rupees.

However, the investing companies themselves have hit on a goldmine, because their combined investment of Rs 1 crore is now said to be valued at over Rs 100 crore (Rs 1 billion).

That all three companies are linked is evident from the fact that some of the finance companies that have invested in the share-owning companies' preference shares have the same address in Delhi.

[Arun 795]

and the bashing back from the Mukesh camp continues... :'(

Reliance Infocomm, the telecom services arm of corporate behemoth Reliance Industries, on Sunday trashed reports of discrimination in share allotment, saying all its equity investment transactions have been fair.

Reports of discrimination in Reliance Infocomm's share allotment came amid the raging ownership and management feud between the Ambani brothers, who manage Reliance Industries.

"Over the past few weeks, vested interests are continuing an unabated tirade of disinformation and distortion about allotment of shares in Reliance Infocomm initiatives," said a company statement issued here.

"In an attempt to intensify the campaign, for the last few days, misleading information is being spread through electronic and print media about these issues," it said.

"This systematic and deliberate propaganda is targeted at Reliance Infocomm and its chairman (Mukesh Ambani)."

Earlier, reports had indicated that Reliance Infocomm allotted a part of its equity to a set of little-known individuals at one rupee a share, while Reliance Industries had paid a premium of Rs.249 for a portion of its shares.

Terming the reports as baseless, the Reliance Infocomm statement said there had been no difference in either the share prices or the number of shares allotted to Reliance Industries or other corporates.

The statement said the total equity base of Reliance Communication Infrastructure Limited, the holding company of Reliance Infocomm, comprised two billion shares.

Of these, 900 million shares have been allotted to Reliance Industries and 900 million to other corporates. The remaining 200 million shares are held in a trust for business associates and employees.

According to the statement, Reliance Communication Infrastructure initially issued 810 million shares each to Reliance Industries and other corporates at one rupee each.

Subsequently, Reliance Communication Infrastructure issued 90 million shares at Rs.250 each to both Reliance Industries and other corporates, it said.

"Hence the question of any discrimination to Reliance Industries or loss to its shareholders does not arise at all," said the company.

[deepu 0]

Ambani vs Ambani: It's A Mindgame

Sharika Muthu

The mind is its own place...

John Milton

While the business world watched the Ambani boardroom battle with bated breath, the media hounded the duo for juicy news bytes and colourful photo ops.

And why not? What is done – or even uttered – by the heirs of a Rs 1000 crore empire certainly makes news. And very interesting news indeed. So what is it that leaves an impression on the crowded mindspace of the viewer / reader?

From the relentless media coverage of Ambani and Ambani, emerge distinct profiles of the two brothers. Let’s introduce you to them.

Who they are, what they are...

Although just a couple of years alder than his sibling, Mukesh, the chairman of the Reliance Group, has often been heard to remark that Anil is “like my son”. A go-getter by all accounts, his personality is readily associated with hard work, a focussed approach and an obsession for success.

Anil, the younger one - Vice-Chairman – is equally at home with spreadsheets and spirituality. Flamboyance is his middle name, something that’s amply evident in his fleet of fast cars. The financial wizard at Reliance, Anil has a strong bond with his family.

The metrospiritual and the monk

While earthy, practical Mukesh is mostly ensconced with figures and files, high-flyer Anil is typically the public face of the business. While family man Mukesh is seen mostly in the company of his immediate family and business advisors, charming Anil can boast of a string of friends-in-high-places.

Clash of the titans

And the comparison doesn’t stop there – it stretches into the realm of personal style and image. While staid Mukesh is mostly seen dressed in dark suits with conventional cuts, his dashing younger brother’s impeccable dress sense is reflected in contemporary cuts and pastel colours.

When in doubt...

Even their reactions to life’s problems are strongly contrasted. In such situations, Mukesh typically retreats into a conclave with his tried and trusted aides, while Anil (as has been well-documented by the media) seeks solace in spiritual destinations.

For instance, soon after the bitter exchange with his older brother, he famously dashed off with family to Tirupati. This, besides his pilgrimage to Mathura to pray for “peace within the family”.

And while their business war – which is far from over – will be amply tracked in the media, it is the personalities and temperaments of the two brothers that will prove to be the real weapons in this colossal mindgame.

[Arun 795]

The Reliance saga could finally be reaching its climax.

Businessworld | February 25, 2005

Ambani vs Ambani - A Final Solution in sight ?

According to a news story published in the latest issue of Businessworld, ICICI CEO K V Kamath may have succeeded in brokering a deal between the two Ambani brothers -- Anil and Mukesh.

Kamath, who is acting as an arbitrator in the dispute, has prepared his final report, which suggests a way to carve up the empire between the two.

The brothers are expected to present it to their mother Kokilaben Ambani in the next few days.

Over the last couple of days, Kamath has had several rounds of meetings with the two Ambani brothers at his Bandra Kurla Complex headquarters in Mumbai, sometimes separately with each one and also together.

According to the terms of the division, Anil will now get to run Reliance Energy and Reliance Capital. Additionally, he will also be given the petrochemicals business of Reliance Industries.

It is expected that the petrochemicals business of RIL would be hived-off and merged into IPCL, which will then be managed by Anil. Mukesh, on the other hand, will get the oil and gas business of RIL and also continue to run Infocomm.

On the face of it, the division appears equitable. Before Reliance Petroleum was merged with Reliance Industries in 2000-01, both the businesses were almost of the same size. So what Kamath has apparently now recommended is to once again split RIL into two -- giving the brothers a mutually acceptable share of the company. This way, he has also allowed each brother to retain the businesses they had initiated.

For example, Anil gets to keep the two businesses -- Reliance Capital and Reliance Energy -- which he had initiated, while Mukesh gets to keep Infocomm.

If the final settlement finally proves acceptable to the brothers, it would mean that Mukesh is now willing to climb down from his original stand of not splitting RIL.

[city02 63]

It seems so unlikely that Mukesh would ever agree to such a settlement. I feel its wishful thinking...

If Mukesh agrees to give IPCL to Anil it would be a huge victory for the weaker camp (let alone RPL biz).

Its hard to imagine him giving the petroleum part over when he explicitly demanded it earlier.

however it does seem the most fair division but since when did that ever matter?

[Chirag 5]

to the general public, it wont really matter who gets what share. But wht wud matter wud be the split in the multi-crore biz. The split will also mean that such a huge biz that india cud always boast of, will now be broken into pieces!

I wonder wht wud have happened if dhirubhai had more sons!

[deepu 0]

Similar splitting up of huge enterprises have happened before too!!

AT&T is an example!!

I believe that this splitting up will help Reliance to grow more and wider and globally!!

[Arun 795]

The Financial Express

Posted online: Wednesday, March 23, 2005 at 1921 hours IST

Updated: Wednesday, March 23, 2005 at 1936 hours IST

NEW DELHI, MARCH 23:

In a dramatic development in the long standing family feud between the Ambani brothers, TV reports said that Anil Ambani is all set to take over the Reliance Infocomm.

NDTV reported, claiming access to inside sources that the top management has been informed about the decision. The proposed meeting at the Dhirubhai Ambani Knowledge Centre has been canceled and the office is set to be shifted to some other place.

The current management has been asked to shift office and reports indicate that Anil Ambani could soon take over Reliance Infocomm.

However, these reports are yet to be confirmed.

But Ambani sources could not be reached for any comment on the possible development.

Intersetingly, Reliance stocks closed higher today though the Sensex shed 81 points. Reliance Industries shares closed up 1.6 per cent at 553.15 rupees ($12.6), after rising as much as 4.8 per cent, while power utility Reliance Energy ended up 0.8 per cent at 537.35 rupees, after rallying as much as 5 per cent.

[jusmail 0]

Wonder what changes in functioning if any will occur out of this? Maybe a look at Infocom's GSM operations in MP, Chathisghad, etc. will throw some light on this!!!!

[deepak gupta 0]

In a dramatic development in the long standing family feud between the Ambani brothers, TV reports said that Anil Ambani is all set to take over the Reliance Infocomm.

NDTV reported, claiming access to inside sources that the top management has been informed about the decision. The proposed meeting at the Dhirubhai Ambani Knowledge Centre has been canceled and the office is set to be shifted to some other place.

28761[/snapback]

hi dude,

ya its true.Anil is going to take over Infocomm.since Mukesh is going to take RIL and IPCL.the main dispute is regarding RIL which Mukesh will never leave at any cost.the result will be Anil getting Infocomm which he opposed tooth and nail while establishment.

so all u RIM customer,be prepared for it.i think RIM will be closed.even if Anil agrees to manage it,it will be a tough job.

though Anil manages everything very well but we have to wait and watch.

hope we dnt suffer any more

deepak

[Basant 0]

Wonder what changes in functioning if any will occur out of this? Maybe a look at Infocom's GSM operations in MP, Chathisghad, etc. will throw some light on this!!!!

Reliance GSM operations in Orissa, Chhatisgath, Jharkhand are as worse as Infocomm. Though it started GSM operations 5 years back, the service network is restricted to few cities/towns.

Since Reliance foundation and corporate philosophy have questionable marks, it hardly matters whether managed by Mukesh or Anil.

[imvikky 0]

Ya I heard that too yesterday from a Reliance official right there in Mumbai... But I was at my relatives home n could not come on net...

[Chirag 5]

Ambani brothers drop non-compete clause

Palakunnathu G Mathai in Mumbai | March 28, 2005 08:57 IST

Rediff.com

The settlement of the dispute over the ownership of the Reliance group between Reliance Industries chairman and managing director Mukesh D Ambani and Reliance Industries vice-chairman and managing director Anil D Ambani is still three or four months away, but both sides seem to have dropped demands for a non-compete clause and have instead tacitly agreed that they will not enter each other's areas of business for five years.

"Reliance Industries has gas and Mukesh Ambani may want to get into the power industry. Anil Ambani can bid for oilfields. This is not an issue," a source said. He said demands for a non-compete clause had been originally raised but were later dropped.

Attempts to contact Reliance executives for comments on a Sunday proved futile.

New mediators, too, have entered the picture. Two sources confirmed that the late Dhirubhai Ambani's sons-in-law, Duttaraj Salgaonkar and Shyam Kothari, were mediating in the dispute and trying to ensure a quick and fair resolution.

"They're playing a very positive role," a source said. The Ambani brothers have not met. Nor are any other meetings being held.

But ICICI CEO and managing director K V Kamath, too, was still involved in the matter, a knowledgeable source said. Anil Ambani's financial adviser Amitabh Jhunjhunwala is representing the younger Ambani's interests.

Kamath is understood to have roped in JM Morgan Stanley chairman Nimesh Kampani to value the Reliance group's assets.

The ICICI managing director is said to have suggested a partition of the Ambani family's holdings in Reliance Industries in a 30:30:40 ratio, with Dhirubhai Ambani's widow retaining 40 per cent of the family holdings.

Mukesh Ambani would then buy his brother's 30 per cent stake. Anil Ambani seems to have demanded a premium for the shares in exchange for relinquishing management rights in Reliance Industries.

He, in turn, would then use the money to buy out Reliance Industries holdings in Reliance Energy, Reliance Capital and Reliance Infocomm. The source also mentioned that a 50:50 ratio had been bandied about and that it was difficult to state which the correct formula suggested was.

However, the valuation of Reliance Infocomm still remains a bone of contention, sources said.

As has been widely reported, any settlement would probably leave Anil Ambani with Reliance Energy, Reliance Capital and Reliance Infocomm, which is currently run by Mukesh Ambani. The Reliance chairman would then be left with Reliance Industries and Indian Petrochemicals Corporation Ltd and Reliance Lifesciences.

Reliance Infocomm had been offered to Anil Ambani around December 2004 but this was initially scoffed at. Only now is the younger Ambani said to be considering the offer in a more serious light.

"Both brothers are faced with an emotional dilemma. Anil will have to quit Reliance Industries with which he has been involved for years. Mukesh will have to quit Reliance Infocomm, which he promoted, " the source pointed out.

[Basant 0]

According to ET it now almost certain that Anil will take over Reliance Infocomm.

These bros have scrwed-up great technology and superb business plan that Dhirubhai had visualised. Let us hope Anil's tenure would bring in refreshing changes in the way Infocomm operates.

Anil can surely take few lessons from this Forum. He will understand what Reliance users feel about the technology and the company.

Why not invite Anil to this Forum?

[Chirag 5]

Ambani deal, the inside story!

T Surendar & Indrajit Gupta | April 01, 2005

]Rediff.com

Saurabh Shukla couldn't help but notice the sudden closure of the green, blue and white Reliance Infocomm customer service centre last week.

Like hundreds of executives who work out of the Kamla Mill Complex, a sprawling office complex in mid-town Mumbai, the 40-year-old advertising executive was familiar with the bustling service centre, where some of his colleagues paid their telephone bills even till last month.

But all of a sudden, the centre has been shuttered and the 80-odd service agents who worked there have been shifted to another location in uptown Mumbai -- at just a two-week notice.

Shukla may not know it, but there's a good reason for the hurry: the building where the centre was located belongs to Anand Jain. A trusted family friend, Jain was the person whom Reliance vice chairman Anil Ambani had targeted in his media campaign, accusing him of creating a rift between him and his brother, Reliance chairman Mukesh.

This may be a small sideshow in the larger-than-life battle between the Ambani brothers. But yet again, it is evidence that a settlement between the two is now imminent.

As Businessworld reported recently, Anil is all set to take charge of Reliance Infocomm. He has already begun sounding out senior telecom executives in the industry to be a part of his new-look team.

But before the younger Ambani moves onto his brother's turf, a big clean-up exercise is on to quickly remove any embarrassing linkages. The closure of the Kamla Mill service centre is one such.

For more than a month now, Mukesh's confidants, Manoj Modi and Anand Jain, have both vacated their second floor offices in 'I' Block at the Dhirubhai Ambani Knowledge Centre (DAKC) in Navi Mumbai and moved to the Reliance Industries headquarters in Maker Chamber IV.

Even as the final settlement is awaited, there is now endless speculation on how the Ambanis will carve up the sprawling Rs 99,000-crore (Rs 990 billion) empire. It is certain that Mukesh will control the flagship Reliance Industries (RIL), while Anil gets to run Reliance Energy, Reliance Capital and also own Reliance Infocomm.

But while the broad division of assets now seems somewhat clear, the intricate details of how the complex deal will be spun are still cloaked in secrecy. And that's the real story.

After all, as they say, the devil's in the detail. Businessworld spoke to a range of Reliance employees, analysts, corporate lawyers and chartered accountants to piece together a sketch of how the complex deal can be struck.

One finding that emerged straightaway from these detailed conversations is that a clear division of assets, as suggested in media reports (especially of the investments that RIL holds in Reliance Energy and Reliance Capital, or even a split in RIL) is ruled out.

Instead, ICICI Bank CEO K V Kamath, who is advising the Ambani family, is likely to recommend a simple, transparent way -- as opposed to a strategic sale -- to define control and ownership for the two brothers.

In other words, he will choose a path that will be easy for the Reliance group to sell to shareholders, regulators and the investing public at large.

Before getting into how that can be done, let's explore the reasons why an actual division of assets is so tricky.

One, the flagship Reliance Industries' competitive advantage comes from its vertically integrated structure. So, unless the synergies of upstream oil exploration and downstream petrochemicals business continue to exist, RIL's future is threatened.

Besides, splitting RIL could seriously affect investor confidence in the Reliance group. "RIL is India's largest publicly listed company. They cannot split it according to their whims and fancies," asserts an equity analyst at a foreign broking house.

Two, hiving off RIL's investments in two companies -- 43.68 per cent in Reliance Energy (REL) and 47.20 per cent in Reliance Capital (RCL) to Anil -- is equally difficult. Even the Reliance group companies issued a denial to that effect to the stock exchanges last week.

The reason is simple: if RIL were to sell its stake in REL and RCL, at present valuations, the buyer would have to cough up nearly Rs 8,000 crore (Rs 80 billion) in cash to buy that stake.

Further, according to the existing rules of the Securities and Exchange Board of India, the buyer would also have to make an open offer to buy a further 20 per cent stake in the two companies at an additional cost of Rs 4,000 crore (Rs 40 billion). Raising such large amounts of cash is out of the question.

Even if the Ambanis were in a position to do so, it would immediately alert the taxman. That also explains why Mukesh cannot buy out Anil's stake in RIL, which would need similar amounts of cash.

Finally, cutting off the umbilical cord that connects Reliance Energy to RIL could prove detrimental. Energy is a huge growth avenue for the group, but it would continue to require investment from RIL's huge cash flows.

So how do you then carry out a separation that is equitable to both parties? Any division of the empire could be equitable if it is based on two important parameters: total free cash flows and market valuation.

At nearly Rs 11,777 crore (Rs 117.77 billion) a year, RIL accounts for more than 70 per cent of the free cash flows of the group. It also contributes 86 per cent of the group's market valuation.

Apart from the huge pitfalls involved in splitting Reliance Industries, there's one good reason why the Ambani family would be loath to give up ownership of their 34 per cent stake in RIL. Every year, RIL gives them a tax-free dividend of Rs 250 crore (Rs 2.5 billion).

So far, the Ambani family's stake in Reliance is held through a web of over 400 investment companies, whose ownership is not clearly defined. As the head of the family, Mukesh Ambani exercises control over these companies and the dividend income goes into a family pool account from which expenses are drawn.

The brothers have been withdrawing from the pool based on an unwritten understanding between them.

As the brothers and their wives seek to run their families separately, Kamath is likely to propose that the ownership now be properly defined. That means splitting the family's stake proportionately, so that each of them receives his share of the dividend.

Just as Businessworld had reported in its cover story, Showdown At Maker IV (10 January, 2005 ), the formula is likely to be 30:30:40.

In other words, 30 per cent of the dividend will go to Mukesh, 30 per cent to Anil, and 40 per cent to their mother Kokilaben. Ten per cent of the mother's share could, in turn, be split between the two Ambani daughters. After her death, her 30 per cent share would be divided between Anil and Mukesh.

But while ownership may rest with the family, Mukesh will be allowed full control of the family's stake. Anil and the rest of the family will sign away their voting rights in favour of Mukesh.

At current market prices, Anil's 10.2 per cent stake in RIL would be worth about Rs 7,500 crore (Rs 75 billion).

So what does Anil gain from the deal? How should he be compensated for giving up control of RIL?

There are two possible approaches. As explained earlier, there is little scope to delink RIL's stake in REL and RCL. Instead, Anil is likely to be given full operational control of the companies that he has run in the past.

According to insiders as well as merchant bankers, RIL will have a new holding structure: it will create a special purpose vehicle (SPV) in the form of a wholly owned subsidiary company, which will hold the investments in REL and RCL.

As a representative of RIL, Anil will get to control the board of the SPV and run the two companies independently. To compensate Anil for relinquishing control of RIL, Mukesh will let go of his pet project, Reliance Infocomm.

As an unlisted company, it is easier to transfer stake without regulators raising questions. Of course, inside DAKC, Infocomm employees are still coming to terms with Mukesh's decision to hand over control of his pet project. "Obviously, he has chosen his head over his heart," says a senior Reliance employee.

Earlier, global investment bank Merrill Lynch had valued Infocomm at $13.7 billion (approximately Rs 58,000 crore).

Even though Mukesh owns 45 per cent of Infocomm, it is believed that the stake was bought using the family's funds. Anil had contested that half of Mukesh's share should effectively belong to him. If Mukesh finally accepts that contention, he could hand over part of his own 22.5 per cent stake over and above Anil's 22.5 per cent to give his brother control of Reliance Infocomm.

If Mukesh's full stake is transferred, it would mean that he pays a 'control premium' of Rs 13,500 crore (Rs 135 billion).

Whatever be the final settlement, in the end, it will be small price to pay for bringing the curtain down on one of the most acrimonious family feuds in Indian corporate history.

How the possible settlement will work

Step 1: Split the Ambani family stake in RIL in the 30:30:40 ratio among the two brothers and Kokilaben. Anil Ambani to relinquish control to Mukesh, who gets full control of Reliance Industries' core oil and gas business.

Step 2: Create a special purpose vehicle to house RIL's stake in Reliance Energy and Reliance Capital. Anil Ambani to continue heading the two firms.

Step 3: In lieu of Anil giving up control in RIL, Mukesh Ambani transfers part of his 45% stake in Infocomm to Anil, who now gets to run the venture.

[Chirag 5]

Did any1 think that Anil uses Mukesh's RIM?? Read this to know!

Anil Ambani alleges phone tapping, demands probe

April 07, 2005 18:22 IST

Rediff.com

Reliance vice chairman Anil Ambani has sought a government probe into tapping of his phones by "unscrupulous individuals" working for Reliance Infocomm, headed by his elder brother Mukesh, even as the camps of two brothers are negotiating a settlement to resolve the ownership dispute.

The mastermind of "this criminal operation I am led to believe by reliable sources" is a director of Reliance Infocomm, Anil Ambani said in a letter written to Home Minister Shivraj Patil, in which he has named the director.

The government is believed to have forwarded the letter to intelligence agencies for initial inquiry. The home ministry had last month extended a security cover to Anil after he complained of receiving threatening calls.

In his communication Anil said that the concerned director is a "directly affected party" in any family settlement that takes place over the coming months on issues that have been widely reported in the media.

Anil also named two top officials of the Reliance Group, accusing them of assisting the director.

Stating that "their action, if true," constitute an unprecedented and criminal invasion of privacy and gross violation of his constitutional rights both as an elected member of Parliament and a private citizen, Anil said "in view of the grave and shocking nature of the charges, I would urge you to order an urgent official inquiry into the matter by a competent government agency."

Amid reports that Anil may get Reliance Infocomm, Reliance Energy and Reliance Capital as part of settlement between the two brothers, the latest development may cast a shadow on the negotiation process.

He said that people involved in tapping of his mobile and land line phones had understandably imported GSM chip cloning machines and other tapping equipment that are available for sale in Israel and other other countries.

"Using this equipment directly and through privately hired parties these unscrupulous elements have cloned GSM chips of my numbers as well as those numbers being used by my personal staff," Anil said in a recent communication to Patil.

[shan 0]

Infocomm denies tapping phones

April 07, 2005 21:49 IST

Reacting sharply to reports that Reliance Vice Chairman Anil Ambani had sought a government probe into tapping of his phones by 'unscrupulous individuals' working for Reliance Infocomm, the company has denied the allegations vehemently.

'We are shocked about the reports in a certain section of the media about a letter allegedly written by Anil Ambani to the Home Minister seeking a probe into alleged tapping of his and his personal staff phones,' the company said in a statement.

'Reliance Infocomm categorically denies any attempt by the company or its officials to tap anyone's phone, much less that of Anil Ambani or his office,' the statement added.

'The allegation is baseless and malicious and the company strongly refutes the same,' Reliance Infocomm said.

[Basant 0]

The fight has reached it heights...........!

After telephone tapping, what cd be the next?

Guess...............!

[Arun 795]

Ambani brothers settlement some time away

2005-04-07 20:09 - CNBC - TV 18

CNBC-TV18 learns that the two Ambani brothers have not reached any consensus on the valuation of Reliance Industries and Reliance Infocomm as they work out a settlement formula.

On March 24 CNBC had reported that the settlement was still some time away as discussions continued on valuation and tax issues. Now, CNBC learns that there are two points of contention.

CNBC-TV18 learns that one brother claims that RIL's fair value for settlement purposes, is below current market price. The other insists that Reliance Infocomm's valuation is overstated.

It's obvious that the cash payout between the brothers will depend on how these two major entities are valued as together they form the bulk of the Ambani wealth.

These gaps in valuation perception will have to be negotiated before any settlement is arrived upon.

[Arun 795]

If Anil Heads Reliance

Ibrahim Ahmad - Voice & Data

Tuesday, April 12, 2005

If Anil gets Reliance Infocomm, as rumor mills are rife with speculation, there is unlikely to be any change as far as Reliance's dream and vision to be an integrated end-to-end service provider is concerned. This is a very strong trait of the Ambani family-even in petrochem; they aspire to be integrated end-to-end company.

I see a great opportunity for Anil Ambani. In spite of all the things that Reliance Infocomm has done in the Indian marketplace till date, there are lots of loose ends to be tied up, lots of issues to be ironed out, and lots of competition to be handled. And these challenges are only increasing. Clearly, Mukesh would have got more and more stretched for time. If Anil takes up Infocomm, we will see a more aggressive and streamlined Reliance, because he has more time on his hand. While all along Mukesh has been seen as the leader in the Reliance family, heading Infocomm will give Anil the opportunity to prove that he is no less.

If Anil comes, fresh thinking and approach to business is likely to follow. Re-structuring, of senior people and their responsibilities, if not the organization structure is likely to happen. Getting a completely new team might not be very easy in an industry where there is a dearth of new generation telecom CEOs, but Anil will surely ensure that team leaders who agree with his vision come in.

The first phase of Reliance Infocomm was all about getting things rolling. Mukesh was very successful at it, as his aggressive and result-oriented top-down, and highly centralized management style ensured that network rollouts were fast and vast. For the second phase, which will be more about innovative thinking, greater customer orientation, flexibility, de-centralization, and co-operation, Anil might be a better bet.

One of the biggest challenges before the Tata, Reliance and Bharti group is dealing with the incumbents BSNL and MTNL, both of which have big expansion plans in terms of new services, reach, and technology. Anil Ambani, because of his political interests and connections, is better placed to manipulate the incumbent operators to his company's advantage.

One front where Anil Ambani and his advisors will have to give a thought is his image. Compared to Mukesh, who was seen as workaholic, focused, and an aggressive taskmaster, Anil is perceived as a politically inclined Page 3 party hopper, who has lots of other diversions in life, beyond work. Also, he has been coming out as a loser in his fight for dominance over Reliance. All these will be fodder for the rumor mills, give boost to competitors, and obviously not help in building investor confidence. User base of Reliance, consumers as well as enterprise user, will continue to grow un-affected, unless there is some massive goof-up.

Finally, if Anil gets to head Reliance, competition will likely end up with more sleepless nights.

[Chirag 5]

How to repair the Reliance image

BS Strategist Team | April 19, 2005 14:05 IST

Rediff.com

The recent spate of controversies has taken the shine off the Reliance image. The Strategist asks some well-known image consultants how they would initiate damage control in what has been India's most dynamic business house.

Dilip Cherian, Head, Perfect Relations

The flight path for the Ambani brotherhood version 2.0 that I would prescribe would have at least two distinct aspects, to start with.

The brothers, once they decide on the Kamath formula and its money modalities and on finally going their separate ways, will simply have to find a clever method by which they will each become truly independent entities on and of their own.

They would inevitably have to then derive independent and coherent image structures. Only one of them will, in image terms, be actually able to inherit the so-called Reliance brand.

So the other, whosoever that is, will have to abandon that precious umbilical cord, at some stage, which is not so far in the future.

This could be a serious issue. It could even be the basis of some rather hardball bargaining at this stage, and with good reason. The Reliance Brand, after all, has a substantial and exploitable value of its own.

This image advantage will be one that both parties will seek to retain. But they cannot. In the end, only one will be able to appropriate the benefits. If both do, both lose.

(Wicked thought: the other brand available to inherit is the underlying and latent brand Ambani. Could one be traded off against the other? Do both have the same value? Can this be the basis of an equal image bifurcation?)

But what's been outlined so far is only Step Two. Substantively, there's Step One before that. Even before this bifurcation of images takes place, the brothers would be well advised to spend a considerable portion of their communications energies drawing attention to the reorganising of their new corporations.

To take attention away from the minutiae of disconnect, both will also have to do big-ticket announcements that will occupy the space hostilities had previously gobbled.

Unless there is the unleashing of fresh corporate energy of the gigantic variety, there will be the temptation to return to the battlefield stories.

And the Buzz space? Only the quiet hiss of frenzied internal reorganisation work in progress. It involves the re-establishment of corporate governance, and the refurbishment of credible management talent at the top levels in both companies. Basic, mundane and boring, but it gives confidence.

The Reliance image is like Humpty Dumpty: all the king's horses and all the king's men can never put the original image together the way it was. But an image makeover is certainly possible.

Harish Bijoor, CEO, Harish Bijoor Consults Inc

Reliance is a brand. It is a thought that lives in the minds of three distinct segments of people with whom a brand typically communicates: the B2B segment, the B2C segment and the C2C segment.

But Brand Reliance has a problem -- a big one. It is a sullied brand today.

The needs and aspirations of each of these segments is different. But everyone has a worry. In the B2B segment, are vendors worrying about the state of the agreements they've signed with the group.

In the B2C segment, the image of Reliance as a squabbling entity is one consumers love to talk about. Apart from shareholders, there are also the actual users of Reliance facilities, be it in power or telecom or petroleum.

Add to this the circuit of the fringe set who are neither business partners, vendors nor consumers. These are the potential consumers. Most brand communicators ignore them. I would look at them keenly.

I would address each of these segments with care and sensitivity. First of all, I would urge an immediate cessation of hostility before this communication task begins.

The rules are simple: all dirty linen must be washed in private; and keep politics out of the issue. It adds a different dimension altogether. Never mind that we have a member of the Rajya Sabha at the centre of the issue.

What's done is done. Don't add any more negative baggage to the brand anymore.

I believe communication is not a single piece of work. It is a cascade. Crisis management communication needs to be a quick and efficient cascade that address all the segments I have delineated.

A brand communication cascade is a set of repeat experiences, each different, but each engineered to result in a series of thought. This is a corporate issue. The role of PR is clearly dominant compared to the role of advertising.

I would use the tool of systemic PR to advantage. But, with sensitivity.

PR is like an onion. The first layer is 'pink paper' PR -- messaging that will appeal mainly to corporate readers. Then there is deeper, 'white paper' PR, which appeals to the lay reader as well.

That is followed by 'pink' and 'white' television. The final layer is the core: the larger mass of people, some of whom are exposed to all or some of these media, and some not exposed to these at all.

I would address each as a separate package, but not make the mistake of restricting the communication cascade to the elite. The brand is a much deeper entity.

Prema Sagar, Principal & Founder, Genesis Public Relations

And they lived happily ever after. Cut to a happy family picture. Real life, sadly, does not reflect reel life. Be it Gucci, Rite Aid or U-Haul; international desi businesses like Pataks; or, closer home, Bajaj, Birla and yes, Reliance, family feuds are as much a fact of life as of fiction.

Perhaps that is why, internationally, only one out of 10 family businesses survives to the third generation.

This is not to run down the power of family-run businesses. Names like Ford, Fidelity, Nordstrom, Tata, Birla and countless Indian businesses bear testimony to that.

The problem arises when the dividing line between business and family matters is blurred; when board meetings resemble dinner-table conversations and professionalism takes a back-seat to ego clashes. That is the time to raise the red flag.

Those that do, realise quickly that the process of mending fences and rebuilding corporate reputation extends far beyond managing the media and the odd AGM appearance.

For those who do not do damage control in time, the media invariably jumps into the arena, shareholders lose out and reputation is impacted.

Fast forward to today. The good news is there is progress -- but not enough. With foreign investors having made Reliance a symbol of today's Corporate India, there is immense responsibility resting on the shoulders of the Ambani brothers to redeem not just their own company but also the image of professionalism in Indian business.

The first step in this direction would be clear and concise communication from both brothers -- collectively or individually -- about the agreement, what it means to the stakeholders and how they will continue to build value and world-class organisations.

The next step would be to take stock of the course after the embankments have been breached by the torrent. This would be by measuring perception and reputation year on year through stakeholder research.

It is imperative to professionalise communications for a strategic plan to reverse the damage and rebuild reputation. Focused outreach programmes would need to be built to address key editors, bureaucrats and analysts separately.

Accessibility, honesty and transparency would need to take the place of closed-door mystique.

Shareholders are looking for comfort that systems are being put into place for corporate governance. So, set up advisory boards that comprise large customers, respected industrialists and/or economists who will give independent advice to the management on key issues of importance to the market place.

These boards must comprise fiercely independent people. An endeavour to seek counsel from people who have squeaky-clean reputations would help the perception that there is a single-minded focus on restoring Dhirubhai's legacy.

Cut to a smiling sibling picture. . . at least, they worked happily ever after.

[deepu 0]

It's Reliance XI versus me: Anil Ambani

Setting the stage for a stormy board meeting of the Reliance group's flagship company, Vice Chairman and Managing Director Anil Ambani on Wednesday termed his fight as Reliance Eleven versus Anil and alleged that several people wanted him to be out of the company.

Minutes before the board meeting at the RIL headquarters at Makers Chambers in Mumbai, Anil told reporters: "I have put it on record. The board has chosen to ignore all my communications," when asked about his letter stating that elder brother Mukesh's aide Anand Jain wanted him to be out of the flagship company's board.

"I still continue to serve on the company contrary to the designs of several people who do not want me in the company," Anil said.

On the issue of RIL board's corporate governance committee giving a clean chit to Mukesh, the younger sibling, engaged in a bitter battle over ownership of Reliance empire, said: "This is a very different type of cricket game. You got Reliance Eleven Vs Anil Ambani. . . what do you expect?"

Taking a wide range of questions including on the controversy over his resignation from IPCL, Anil said: "Clearly I am in minority as far as rewarding shareholders, transparency and governance issues are concerned."

Asked if there was a conspiracy to remove him from RIL, he said: "I have put this on record to the board of directors and the board of directors have chosen to ignore all my comments and suggestions."

On the reported decision of the IPCL board, from which he had resigned on January 3, at its meeting on Tuesday that Anil should reconsider his decision, he said: "It is 11.20 a.m. As of now I have no communication on my offer to resign from IPCL board. I do not know what IPCL board is doing. I do not know whether they have communicated to stock exchanges."

On further questioning, Anil, whose name was quietly deleted from the list of directors on IPCL's official Web site recently triggering a controversy, said he had not heard from the IPCL board so where was the question of 'reconsidering' resignation.

IPCL informed the stock exchanges after the January 20 board meeting that it had decided to ask Anil Ambani to reconsider the decision but in a subsequent communication last week said that he ceased to be a director on the company's board.

On what he would do at the board meeting, Anil said that he was still the vice chairman and managing director. "I was appointed by the body of shareholders and I owe my ultimate responsibility to three million shareholders of the company."

Vouching by legacy of his father and Reliance founder late Dhirubhai Ambani, the younger brother said: "I have maintained in the past that the company is professionally run. . . we have great talent in the company. We have very strong system and foundation."

He said that it was the time for rewarding the shareholders who stood by the company for many years.

courtesy - rediff.com

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[deepu 0]

Anil questions role of Nikhil in "family issues"

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In a clear signal to "outsiders" to keep out of the efforts by the Ambani family to resolve the ownership dispute in the Reliance empire, Anil Ambani today attacked a cousin who is an Executive Director on the flagship Company RIL's Board.

The younger Ambani sibling, RIL's Vice Chairman and Managing Director, accused Nikhil Meswani, who is close to elder brother Mukesh, of "misleading" the media and investors on family issues.

Speaking through his spokesperson, Anil said "Nikhil Meswani is not involved in discussions (in the family to resolve the dispute), he has no locus standi." Later in the evening, RIL, headed by Mukesh Ambani, spokesperson "strongly refuted" allegations propagated through a section of the media against Nikhil Meswani, who, however, did not comment on the issue.

"All allegations are baseless," the spokesman said.

Speaking from Mumbai, Anil's spokesperson said "Nikhil was involved in false briefing in violation of SEBI's insider trading regulation and fradulent trade practice regulation", and added "strong regulatory action is required to protect interests of Reliance shareholders." The sudden attack on Meswani is seen as an indicator of Anil's desire not to allow any "outsider" to come in the way of a settlement being worked out by mother Kokilaben. Sisters Dipti and Nina are also in the picture.

[Agency]

[deepu 0]

Mukesh Ambani meets PM; Lieutenant talks to FM official

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New Delhi, May 5 , 2005

Reliance Industries Ltd Chaiman and Managing Director Mukesh Ambani today met Prime Minister Manmohan Singh and one of his top lieutenant held discussions with Finance Ministry officials, a day after younger Ambani sibling Anil made serious allegations in the ongoing battle for control of the Reliance empire.

Mukesh, who flew in from Mumbai earlier in the day along with RIL Executive Director and cousin Nikhil Meswani, met Singh at his residence but company officials were not availabile for comments on the nature of discussion.

Almost around the same time Meswani met U K Sinha, Joint Secretary handling Capital Markets in the Finance Ministry. The discussions presumably covered issues like Corporate Governance that have been publicly raised by RIL Vice-Chairman and Managing Director Anil, who is engaged in bitter spat with his elder brother Mukesh over the control of the mega group.

After an hour-long meeting, Meswani refused to answer questions from waiting mediamen.

Anil's spokesperson had accused Meswani yesterday of being involved in "false briefing" in violation of SEBI's insider trading regulations and "fradulent trade practice regulation" and had sought "strong regulatory action" to protect interests of Reliance shareholders.

The allegations were strongly refuted as baseless by RIL, which is chaired by Mukesh.

The public wrangling between the Ambani brothers which has intensified in the past two weeks appears to have impacted the delicate negotiations to settle the ownership issues.

[Agency]