It?s out in the open
So it's finally out in the open. On Wednesday, Mukesh Ambani, chairman of Reliance Industries, confirmed to CNBC what has long been rumoured: there are differences between him and his brother Anil.
"Well, there are issues which are ownership issues," said Mukesh adding, however, "these are in the private domain."
The older Ambani then went on to assert that these would not affect the business because "as far as Reliance is concerned it is a very, very strong professional company". He gave the example of General Electric which had moved beyond Jack Welch to become a completely professional company and said that it would be the same with Reliance.
Two questions intrigue Reliance-watchers. One: Why has Mukesh gone public with the differences? And two: What are these ownership issues?
The answer to the first question is hard to fathom. The older Ambani is a shrewd and cautious individual so it is extremely unlikely that he shot his mouth off. He is ready to talk about the differences in public either because a split is now clearly visible on the horizon or because he is concerned that widespread speculation about a family feud might harm the way in which Reliance is perceived.
The second question is easier to answer. At present, the brothers work from two separate establishments: Dhirubhai Ambani Knowledge City in Thane-Belapur and Reliance Centre in Bombay's Ballard Estate.
Mukesh looks after Reliance Infocomm, Reliance Petroleum and IPCL. Anil looks after Reliance Energy and Reliance Capital which includes the asset management company, insurance, the venture capital arm and the company's treasury operations. If a split does occur, then each brother will take what he runs.
That leaves the problem of ownership of the flagship Reliance Industries (RIL) which is now largely professionally managed. RIL has invested over Rs 10,500 crore in Reliance Infocomm and owns 45 per cent of the company. Reliance Petroleum is also part of Reliance Industries.
There seems broad agreement that Mukesh will get to keep RIL but Anil is said to want the gas fields in Krishna Godavri basin in the Bay of Bengal because of the synergy with his energy businesses. And naturally, he will be paid a huge amount for his share of RIL.
All this is of course speculation. But now that Mukesh has gone public, a day of reckoning may not be far off.