Can Mrs Ambani sort out her sons' £10bn feud?

A dispute which has ripped apart India's richest family is coming to court. Could it be time for the matriarch to step in?

Robert Verkaik
Saturday 31 October 2009 01:00 GMT
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It began as a family squabble between two brothers who couldn't agree how to divide their father's inheritance. Seven years later, Ambani v Ambani is the world's richest court battle – and one so entrenched it has defied the peace efforts of the Indian government, the brothers' own mother and even a Hindu god.

This week it was the turn of India's highest court to try to end the warring between Mukesh and his younger brother Anil, who between them own the country's gas industry and are commonly referred to as the richest brothers in the world.

At the heart of the dispute is a 2005 contract which gave Mukesh the rights to India's gas supply and handed his brother the power plants, which need the gas to generate the country's energy.

The legal battle over the terms of this contract is estimated to have already soaked up £20 million in legal fees, but the cost to the country is being measured in much more than just money.

Such is the brothers' wealth and influence in India and across the world that the Prime Minister, Manmohan Singh, has urged them to put the nation's interests before their own personal differences.

Their mother, who refuses to take sides, is understood to be devastated by the shame the litigation has brought upon the family and has made repeated efforts to force her sons to see sense. Even the courts recognise that any settlement may need the maternal blessing of 75-year-old Mrs Kokilaben Ambani.

On Wednesday the prospect of a family-sponsored solution was raised once again, when the Supreme Court of India, home to the country's top judicial peace brokers, tried to bringing the billionaire brothers to the negotiating table. A Bench headed by India's Chief Justice K G Balakrishnan demanded this week in New Delhi: "There must be parameters to arrive at a suitable arrangement."

But friends of the brothers hold out little hope that this intervention will be any more successful than the ones that have gone before.

"This is not just about money or court time, this is a personal battle for supremacy," said a friend of Anil. "They have so much wealth at their disposal that it is a dispute that is too big for for the government or the courts."

The entracted dispute is so complex and wrapped in the multi-layered business affairs of the two brothers that even the lawyers advising on the case can't truly claim to understand the origins of the fraternal animus.

In its most recent incarnation it is a disagreement over the gas deal between the brothers agreed in 2005. Anil has accused his brother of being in league with the Government to set artificially high prices that can only benefit Mukesh. But Mukesh counters that his brother must have known that the price of gas would fluctuate when he signed the contract in 2005.

Whoever wins stands to pick up £11 billion in gas revenues in the next 10 years.

The personalities in the dispute could not be more different. Anil, 50, the poorer – or rather less fantastically wealthy – of the two brothers, has a reputation for using his wealth to mix with celebrities and curry favour with the media.

Married to one-time Bollywood actress Tina, Anil also has Hollywood ambitions. His company Reliance Entertainment is investing $500m in a new studio venture with Steven Spielberg's DreamWorks which has already signed A-list actors George Clooney, Jim Carrey and Julia Roberts to co-produce future films. Anil recently used one of his jets to fly Bollywood legend Amitabh Bachchan to a Hindu temple in southern India, where Mr Ambani handed over £1m cheque as a charitable donation.

Mukesh Ambani, 52, is married to a private school teacher in Mumbai and is slightly less conspicuous in his public profile. He does own the Indian Premier League cricket tream Mumbai Indians and enjoys jetting around the world, but he doesn't court publicity in the same way as his more flamboyant brother.

Friends say the settlement of their father's businesses favoured Mukesh over his brother and this made him more secure in his public and family standing.

The origins of the brothers' disagreement can be traced to July 2002, when Ambani senior died intestate. Soon, disagreements emerged over the controlling roles of the two brothers, and relations eventually broke down.

A truce was brokered in the summer of 2005 by senior banker K V Kamath; Mrs Ambani also played a key role in getting her sons to come to an agreement and sign a "family pact".

As part of the deal, the flagship Reliance Industries Ltd (RIL) went to Mukesh. His share also included the retail and natural gas exploration businesses. Anil got Reliance Communications (R-Com), the energy business, financial services, infrastructure and entertainment.

The tide of public opinion, fueled by a captivated media, is turning against the brothers, who regard their country's gas and energy industries as national rather than family interests.

It is a view that is shared by the Government. "It [the gas] does not belong to them," Petroleum Minister Murli Deora has told the media. "I am personally appalled and disgusted at how these two brothers are fighting over something that belongs to the Government and the people of India."

Gunjan Sharma, a journalist and expert on the Ambani case, agrees. He believes the case could have implications for ordinary Indians: "Mukesh Ambani's firm RIL is supplying natural gas to many other power plants including the Government's National Thermal Power Corporation. If RIL sells gas on a higher price then the power will be sold to people at a higher price too."

Many see it as case about corporate greed and a far cry from the social governance principles upon which the brother's father had based the business.

Ms Sharma added: "The outcome will cause hardship to the common man as well as to farmers and agricultural production units [which cannot afford expensive power]. Power prices going up will increase the cost of production and and, in turn, prices in general."

While the case remains in the courts there is little expectation of a resolution. The Ambani dispute is one of 30 million matters before India's judges, who measure litigation in years rather than results.

So now, the nation's hopes rest with the 75-year-old mother of the tycoon siblings as she tries to use her maternal influence to broker a deal. But no-one is holding their breath.

Anil made a bid earlier this month to patch things up with his brother. He said he was "reaching out to Mukeshbhai [his brother Mukesh]" with a "generous heart", and that there could be "no better gift" for their mother.

But Mukesh rebuffed him, saying that the issues must be settled by the court and that the dispute was "not merely a family matter" but one that involved shareholders. Ambani senior must be turning in his grave.

When brothers fall out: Famous family rows

*Prince Jefri Bolkiah, the youngest brother of the Sultan of Brunei, was accused more than a decade ago of misappropriating £8bn from the treasury while finance minister. He was stripped of his title and pursued through the courts for billions. He stopped speaking to his brother in 2004, although there are recent signs of a reconciliation.

*The footwear firms Adidas and Puma were founded on the back of a rift between German brothers Rudi and Adi Dassler who fell out while sheltering from an Allied bombing raid in 1943. Before the war they worked together, after it they started separate factories and never spoke again.

*Brothers Sir Clement Freud, the writer and broadcaster, and Lucian Freud, the artist, pictured, refused to speak to each other for 70 years after a reputed minor spat. Lucian refused even to attend his younger sibling's funeral earlier this year, having previously ruled out a reunion. "Why on earth would I want to speak to him or see him again?" he said.

*Ma'an al Sanea is at odds with his wife's family, the Gosaibi clan, in a feud being played out in courts around the world, including London and New York. The Gosaibis accuse Mr Sanea of a multibillion-pound trail of bad debt and fraud. Banks are affected because they lent $15bn to the two sides.

*Rock band Oasis was finally disbanded this year when Noel Gallagher walked out after one bust-up too many with his younger brother, Liam. It followed shortly after Liam admitted in an interview that the siblings had stopped talking to each other and would only meet on stage.

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