Will Reliance Ownership issue drag the stock down?
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The ownership of Reliance Industries, India's largest private sector company, is being disputed by the two Ambani brothers who took control of the group more than two years ago.
On Thursday Mukesh Ambani, 47, chairman of Reliance Industries and older brother to Anil, 45, vice-chairman, publicly admitted what most of the company's 3.6m shareholders have been gossiping about for months.
In an interview with CNBC, the business television channel, Mukesh said: "Ownership is an issue. But it is in the private domain." Anil Ambani, who heads Reliance Energy, a subsidiary of Reliance Industries, India's leading petrochemicals company and leading mobile telecoms provider with almost 10m subscribers, could not be reached for comment.
But people close to the family confirmed that Dhirubhai Ambani, late father of Mukesh and Anil and founder of Reliance, died without leaving a will.
Under Indian law, an intestate inheritance should be divided equally between the offspring and surviving spouse. Dhirubhai was survived by a wife, two sons and two daughters.
It now appears the two brothers are unable to reach agreement on how to divide control of Reliance Industries, 46.6 per cent of which is owned by the family. It has, in effect, been under the control of Mukesh.
The group reported sales of $22.6bn and net profit of $1.4bn in 2003-2004. Reliance Energy, the portion controlled by Anil, is expected to post revenues this year of about $1.5bn. Foreign funds hold more than a fifth of Reliance Industries.
"Reliance's shareholders, bankers, stakeholders and customers now deserve an answer," said a senior banker in Mumbai on Thursday.
But observers dismissed the prospect that litigation - still thought to be unlikely - would seriously affect Reliance's share price.
On Thursday Mukesh Ambani, 47, chairman of Reliance Industries and older brother to Anil, 45, vice-chairman, publicly admitted what most of the company's 3.6m shareholders have been gossiping about for months.
In an interview with CNBC, the business television channel, Mukesh said: "Ownership is an issue. But it is in the private domain." Anil Ambani, who heads Reliance Energy, a subsidiary of Reliance Industries, India's leading petrochemicals company and leading mobile telecoms provider with almost 10m subscribers, could not be reached for comment.
But people close to the family confirmed that Dhirubhai Ambani, late father of Mukesh and Anil and founder of Reliance, died without leaving a will.
Under Indian law, an intestate inheritance should be divided equally between the offspring and surviving spouse. Dhirubhai was survived by a wife, two sons and two daughters.
It now appears the two brothers are unable to reach agreement on how to divide control of Reliance Industries, 46.6 per cent of which is owned by the family. It has, in effect, been under the control of Mukesh.
The group reported sales of $22.6bn and net profit of $1.4bn in 2003-2004. Reliance Energy, the portion controlled by Anil, is expected to post revenues this year of about $1.5bn. Foreign funds hold more than a fifth of Reliance Industries.
"Reliance's shareholders, bankers, stakeholders and customers now deserve an answer," said a senior banker in Mumbai on Thursday.
But observers dismissed the prospect that litigation - still thought to be unlikely - would seriously affect Reliance's share price.