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Inside an ugly, and brotherly, fight in India
BANGALORE — An extended, vicious brawl between two billionaire brothers who run gigantic Indian businesses is rattling investors — and giving the government a migraine.
In the latest chapter of the long-running feud, Mukesh Ambani, 52, who owns the petrochemicals conglomerate Reliance Industries, India’s biggest company, and his younger brother Anil Ambani, 50, whose businesses span telecom and energy, are clashing over gas. Specifically, the supply of natural gas from Mukesh’s firm to Anil’s plant.
Anil insists that under a contract signed a few years ago when the brothers partitioned their father’s business empire, he had the right to buy gas from Mukesh’s company at a below-market price.
The ferocious fight started a little after the death in 2002 of the Ambani patriarch Dhirubhai, who built the Reliance empire, and did not leave a will.
The ugly fight now has the Indian government entangled and has crossed several legal strides to reach India’s Supreme Court.
“The family scrap is creating anxiety in the stock markets and hurting investors,” said Arun Nair, a Bangalore-based management specialist who says he has lost heavily on the volatility of the companies’ stocks.
Anil Ambani has accused his brother of refusing to honor a previous agreement which stated the quantity, price and duration of gas supply that his electricity generation firm could buy from his brother’s petrochemicals company.
The fraternal squabbles have reached such a state that many feel they are beginning to hurt India’s business image. “The Ambani companies move and shake Indian business so this is frightening,” said Suresh Hinduja, an investor.
The dent in India’s business image has come not so much from the brotherly spat but from the charges that are being traded in public. At a shareholder meeting earlier this week, Anil attacked Reliance Industries, saying it was trying to become a "monopoly" gas producer. He accused his brother of backing out of the contract because of greed.
Indians are consumed by the battle, whose twists and turns have often rivaled television drama. The two brothers live on separate floors in a luxurious 100,000-square foot multi-storied building in Mumbai’s upscale Cuffe Parade neighborhood. Their mother Kokilaben, who lives with them, has often played mediator in their fights.
The brothers have dissimilar styles. Mukesh, the more restrained and reserved of the two was educated at Stanford University and his managerial and operational skills are much admired. Anil is an MBA from the Wharton School and a whiz at finances and numbers. He is outgoing and married to a glamorous former Bollywood star.