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Reliance restructuring may take 4-6 months
With the Ambanis agreeing to spilt, the scene has now shifted to corporate lawyers and tax consultants to reorganise the group.
With the Ambani brothers agreeing to spilt the Rs 990 billion ($22.6 billion) Reliance business empire, the scene has now shifted to a set of corporate lawyers and tax consultants to re-organise the group.
Experts say the separation of the group companies, which are part of a complex holding structure, between the two brothers - Mukesh and Anil - would take at least four to six months.
"After clearing the path for restructuring, the attempt will now be on making the transition as less costly as possible in terms of saving capital gains tax and stamp duty," said city-based leading chartered accountant Sailesh Haribhakti.
"The least tax incidence roadmap will be formulated by a battery of taxation experts. After separating the group companies between the two brothers, the blueprint have to be approved by a court," Haribhakti said.
"All this should take four to six months time. Once you have the clear roadmap before you, everything else is procedural. So, I think the decision to spilt the group is a major decision in itself."
According to Haribhakti, the separation of entities under a diversified conglomerate is not without precedent in India that has a large number of family-run businesses.
Under the settlement formula, Mukesh will get complete control over the oil refining and gas firm Reliance Industries, which is India's largest private enterprise - and former state-run company Indian Petrochemicals Corporation Ltd.
The younger Ambani will manage power utility Reliance Energy, finance firm Reliance Capital, and telecom services major Reliance Infocomm.
Experts say Reliance would have to file a petition of the restructuring scheme with the high court and also take the consent of various stakeholders to formalise the arrangement.
The board of Reliance Industries has authorised a committee to suggest a roadmap for re-organisation of the business empire.
The corporate governance and stakeholders' interface committee will examine in depth all the relevant issues including statutory and legal requirements and suggest a suitable scheme of re-organisation, said a company statement.
The committee has been empowered to avail of professional and legal expertise to advise on preparing the re-organisation scheme expeditiously.
"The restructuring formula may get delayed only if any of the stakeholders decide to challenge the arrangement in a court of law," said Haribhakti.
