It was Mukesh who opened the floodgates by making a seemingly off-the-cuff remark to a television reporter about “ownership issues”, which he later said was “torn out of context”. Given how painfully cautious Reliance is about releasing information to the media, not many are willing to buy his “off-the-cuff” line. Clearly, the fight had been simmering, and it was only a question of time before it boiled over into the public domain.
Industry sources say that the acrimony started becoming public as early as , probably at the time of a board meeting. Various e-mails and documents circulated within Reliance, which conveniently made their way to the media, show that the board had introduced a supplementary agenda, which sought to redefine the role of managing directors. Subsequently, the resolution, or Item 17 as it is now known, was passed by the board. Essentially, the resolution gave Mukesh the power to reduce Anil’s role in the company. A furious Anil shot off several communiqus to Mukesh and board members questioning them on why the resolution had not been pre-circulated, a procedure that had to be followed before a resolution was passed. Anil was so angry that he told the media that it “is me against the Reliance XI”. But while this incident appears to have made the family feud public, the divide between the brothers had more fundamental reasons.
Apparently, he told a reporter on the sidelines of a conference that there were “ownership issues” within Reliance but these were in the private domain
Of course, a lot of colourful reasons have been attributed to the discord, ranging from Anil’s foray into politics with the Samajwadi Party to more gossipy ones such as the two wives not getting along. But industry observers say that at the heart of the dispute were the divergent views of the brothers on certain key initiatives. For instance, Mukesh’s dream project Reliance Infocomm was implemented on an audacious scale, and was practically underwritten by RIL. Over Rs.10,000 crores of RIL money has been invested in preference shares of the company, at a rate of interest much below market standards. Meanwhile, Anil merrily inked an agreement with the Uttar Pradesh government to set up a Rs.11,000-crore power plant in Dadri. The power project depended on RIL for financial support and gas from Reliance’s fields. Mukesh was reportedly sceptical about the project and was even said to have commented that RIL did not have enough gas reserves to feed the plant.
Reliance is no stranger to https://paydayloansohio.net/cities/franklin/ controversy. The difference this time was that the storm was within the family, which remained closely knit until recently. From the time Dhirubhai Ambani founded his textile trade in 1968, in which he used various loopholes in the country’s import-export policy to expand his business, to the telecom scam in recent times, Reliance was quite often in the news for the wrong reasons. In the late 1980s there was the famous Ambani vs. Nusli Wadia war. In 1991, RIL faced serious charges of share-switching and was hauled up by the Securities and Exchange Board of India (SEBI). Then in 1996, the Bombay Stock Exchange suspended trading in Reliance because of negligence in duplicate shares and share-switching.
Apparently Anil always doubted the viability of the project and objected to the “soft loans” being given to the telecom company
Towards the end of the 1990s, RIL faced an inquiry by SEBI into allegations of price manipulation and insider trading with regard to the sale of its stake in Larson & Toubro to Grasim Industries. And if this is not enough, two of Reliance’s senior executives have been accused of violating the Official Secrets Act. These men were apparently prying around for information on the sanctions imposed on India after the nuclear tests in 1998. It is said that Dhirubhai thrived on controversy.