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Anil and Mukesh Ambani in the news

A week before the Hindu festival of Diwali this month, Indian billionaire Anil Ambani took a helicopter to the Himalayas in a bid to reach an unusual out-of-court settlement.

Visiting a pair of sacred north Indian shrines, Mr Ambani prayed to Lord Shiva to resolve his family succession-related dispute with his elder brother, Mukesh, India’s wealthiest man, ahead of hearings this week in the Supreme Court. ‘Invoking the power of Lord Shiva from this most sacred of holy places, I am once again reaching out to Mukeshbhai and hope and pray that my feelings will be reciprocated,’ Mr Ambani said.


Unfortunately, Mukesh flatly rejected the approach. Wits in Mumbai wondered why Anil had flown to the Himalayas to connect with his brother when he could have pushed the up button in their home elevator. Despite their dispute, both live in the Ambani high-rise house in south Mumbai – Anil on the lower floors and Mukesh above him. (Such is their hostility, however, the pair co-ordinate movements in and out of the house – in the past five years, they have never run into each other in the elevator or foyer.)

The Himalayan episode shows how intractable the differences between India’s richest brothers have become. For some the battle, which began when their father Dhirubhai Ambani died without leaving a will in 2002, is an Indian corporate version of Cain and Abel. ‘Their positions are at such extremes that from this point it will be very difficult for either of them to reach a midpoint,’ says a family friend who knows both men.

In March, Forbes estimated 52-year-old Mukesh’s fortune at $19.5bn, ranking him seventh on its rich list. His empire extends from polyester and oil refining to gas production and retailing. Anil, 50, is ranked 34th, with $10bn of wealth in mobile phones, mutual funds and power. He grabbed headlines last year by forging a deal with Hollywood actors and directors, such as Steven Spielberg.

Both brothers revere their late father, adorning their offices with portraits of him. Hailing from a very modest family in Gujarat, Dhirubhai was the most aggressive of India’s modern generation of entrepreneurs. He began as a petrol pump operator, but built India’s biggest private sector company, Reliance Industries, winning the adoration of millions of retail investors for his Warren Buffet-like ability to create wealth.

Anil and Mukesh began their childhoods in a two-bedroom apartment in a ‘chawl’, or tenement, low-income housing for the masses. As Dhirubhai’s wealth grew he developed ties with the business and political elite, notably the Gandhi dynasty, and his family moved up. Both brothers went to the University of Bombay. Mukesh went to Stanford in California for an MBA, but was called back to the family business. Anil completed his MBA at Wharton.

Few tycoons have been blessed with two such competent sons. Mukesh focused on vast engineering projects while his brother, a gifted presenter, handled investor relations. Dhirubhai was one of the few Indian businessmen to conceive projects on a grand scale. Both sons inherited this habit of thinking big. ‘Mukesh is much stronger in vision and execution and Anil is more the financial wizard and the communicator. They complemented each other very well,’ said Harish Goenka, chairman of RPG Enterprises, and a friend of Mukesh.

Of the two, Mukesh is more private. He arrives at work late, but works into the night. He relaxes by watching Bollywood movies in his private cinema, wears simple linen shirts, black slacks and unbranded shoes and is fond of traditional Indian fare, such as ‘dosas’, south Indian crepes. Yet he can hardly be called ascetic. He is building a 27-storey home with floors for parking and he owns a cricket team, the Mumbai Indians, which plays in the Twenty20 Indian Premier League.

Anil is flashier, although like Mukesh, he is a devout Hindu and does not drink or smoke. He is close friends with Amitabh Bachchan, the Bollywood superstar and is married to Tina Munim, a former Bollywood actress. After being teased about his weight, he took up marathons and often runs 100km a week. He was a fan of supercars, including Porches, but now drives a Range Rover.

Some say tensions first arose in 1999 when Mukesh and his ‘camp’ ousted Anil from the nascent telecom business. Relations worsened after their father’s death. Anil felt his brother was snubbing him, removing family pictures that showed them with their father. Although people close to Mukesh deny these claims. The battle went public in a CNBC interview in 2004 when Mukesh admitted to ‘ownership issues’ with Anil. Their mother was called in to broker a deal. As part of the settlement in 2005, Mukesh kept Reliance Industries and its huge oil operations, including its gas discovery in the KG Basin off India’s east coast; Anil received one-third of Reliance’s assets.

The peace did not last. A court battle began over the price at which Mukesh’s Reliance Industries should sell gas to power plants owned by Anil’s arm of the empire. The siblings had agreed the gas should be sold at about $2.34 per million British thermal units. But Mukesh’s Reliance Industries argues the deal was subject to approval from the government, which demanded the gas be sold at $4.20 per mbtu. The Bombay High Court ruled in Anil’s favour and the matter was referred to the Supreme Court. The case has profound implications – output from the KG Basin represents 20 per cent of India’s present oil demand.

The bad blood has caused other problems for the pair. When Anil attempted a landmark takeover of South African mobile operator MTN last year, Mukesh scotched it by claiming a first right of refusal. Even so, the dispute has done little real harm – both empires have soared in value. Reliance Industries was valued at Rs3,364bn on Friday against Rs760bn before the demerger. ‘This is the only acrimonious and no-holds-barred family feud in the corporate world, where both groups have grown in size and kept a steady growth trajectory,’ said a person close to Anil.

Whether the two resolve their differences when the court case ends is uncertain, but Mr Goenka is an optimist. ‘I always believe that blood is thicker than water. Sometimes all it takes is a little give and take.’
Source:ft.com

October 25, 2009 · Filed Under Ambani Family 
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