Reliance settles ownership issues
Government papers over corporate governance issues
From Anil Nair in Mumbai
The Reliance conglomerate settled its differences last week as expected and the markets cheered the proceedings, but the government seems to have been caught in a cleft. The two warring brothers showed remarkable affability in reaching the final agreement, and the credit is due to ICICI Bank chief Shri K.V. Kamath and JM Morgan'shead honcho Nimesh Kampani. The agreement does not settle several issues of corporate governance raised by the younger brother Anil Ambani, mostly in the throes of passion, when he made charges of price manipulation and mismanagement. Company affairs department at that time said that it would look into it. While the Union Finance Minister P. Chidambaram said that the government had the right to seek an inquiry if the company creates any anomaly in the system. Now the corporate world seeks to know if the government will take the inquiry forward.
After the settlement the bonhomie and the geniality in the Reliance group underline the need to look towards the future rather than harp on the past. The two groups are poised towards unprecedented growth possibilities, and any inquiry can prove to be a dampner. But on the other hand, can the government ignore serious charges levelled by top management of a company for the sake of tranquillity.
I am happy that both have reached settlement… I am glad that they have kept the interest of three million shareholders in mind??, Shri Chidambaram said shortly after the announcement of the settlement by Smt Kokilaben, widow of Reliance group founder chairman Shri Dhirubhai Ambani. When asked if there could be a government probe into allegations and counter-allegations levelled by the two sides during the seven month-long ownership battle, he said, ??I am happy that settlement has been reached. Where is the need for other issues??. The Company Affairs Minister Shri P.C. Gupta is even more unambiguous: ?Since the settlement is already there, I think all the issues are resolved?.
The final settlement in the Reliance group has been that Relinace Industries and Indian Petrochemicals Ltd (IPCL) will go to elder brother Mukesh Ambani while the younger brother Anil will get Reliance Infocomm, Reliance Energy and Reliance Capital, and an undisclosed cash component. The cash component for Anil Ambani will be in the vicinity of Rs3,200-crore to Rs4,300-crore, most analysts point out.