Mukesh replies in the name of the father

Five days after rattling the markets and corporate India with his statement on TV about ‘‘ownership issues’’ in the Rs 9...

Five days after rattling the markets and corporate India with his statement on TV about ‘‘ownership issues’’ in the Rs 99,000-crore Reliance group, Reliance Industries chairman Mukesh Ambani did some damage control on Monday.

His statement that the late father Dhirubhai Ambani had settled “all ownership issues pertaining to Reliance group during his lifetime” calmed down the nervous markets. But it did not conclusively clear the air about differences between the two Ambani brothers.

Anil Ambani, vice chairman of Reliance, maintained a stoic silence over the clarification issued by Mukesh. “We have nothing to say,” said an official at Anil Ambani’s office.

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Stating that his remarks on ownership issues were “torn out of context…to build a sensational story”, Mukesh said, “Dhirubhai, with his extraordinary foresight, had settled all ownership issues pertaining to Reliance within his lifetime.” It is, however, not known how these issues were settled and whether Anil Ambani is in agreement. Mukesh’s statement also does not mention Anil at all, but does restate that ownership issues are in the private domain. By invoking Dhirubhai’s legacy in his statement, Mukesh sought to make it clear that he is the chosen successor.

Significantly, soon after, Amit Khanna of Reliance Infocomm told PTI that “Mukesh Ambani was made successor by the late Dhirubhai Ambani and from that moment he is committed to realising Dhirubhai’s dream. The controversy would be resolved to the satisfaction of shareholders and others concerned in the next few weeks.”

	The Q and the A

			• CNBC: You have always courteously refused to answer this question…I am asking you once again—if you choose not to answer, we are not live, I can switch off my camera…There have been a lot of rumours about the Reliance group, and how the businesses are going to in the future. Can you, for the benefit of your investors, tell us if there is going to be a likelihood of a split of any kind in the future? • MUKESH: Within Reliance, we have always separated ownership and management and the process of Reliance has really moved from one two or three individuals…Reliance has moved in the path that Dhirubhai Ambani has set for itself, beyond Dhirubhai Ambani…Reliance has moved beyond any one two or three individuals including myself. There are other issues that are ownership issues, that are in the private domain.

After Mukesh stepped in, the stock markets — which fell by nearly 84 points at one stage — staged a recovery. The BSE Sensex closed with a gain of 2 points at 5,963.80. Reliance, which declined as much as 3.40 per cent to a low of Rs 509.20 in early trades, bounced back to close with a gain of 1.07 per cent at Rs 532.80.

Reliance watchers say Mukesh’s statement was aimed at pacifying the markets, but that it was too early to say whether the issue had come to an end — or to a head. Ramdeo Agarwal, joint MD, Motilal Oswal, said: “Good sense will prevail. They (the Ambani brothers) will solve this issue amicably, I suggest that people should not read too much into this whole affair.’’

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In his statement, Mukesh said, ‘‘It is necessary to remove confusion caused by deliberate misinterpretation or genuine misunderstanding.” Mukesh’s contention: “…I was responding to the query about the future businesses.”

The statement signals the presence of ownership issues between the two brothers. “In a rapid growth phase, all big companies have to deal with several issues concerning corporate ownership of future initiatives. Reliance is no exception. I will like to restate that all such ownership issues are in the private domain. Placed in the context of the question put to me, it is obvious that my reply has nothing to do with the family ownership in Reliance,” Mukesh said.

Mukesh ended by hoping that his clarification would put all speculation to rest. “I wish to assure all stakeholders that I am committed to uphold the steps taken by him (Dhirubhai) and that the foundation of Reliance is and will remain very, very strong,” said Mukesh.