Reliance Industries - The Dispute between Mukesh and Anil Ambani (Part A)

Abstract:

In an MBA class, a professor takes the example of India's largest private sector company, the Rs90,000 crore Reliance Industries Ltd (RIL), to illustrate the importance of succession planning in family-owned businesses. Reliance is owned by a clutch of 14 companies, which in turn are owned by a complex web of investment outfits. The company has been witnessing unprecedented acrimony at the top with the differences between Anil and Mukesh, sons of the late Dhirubhai Ambani, the group's founder having reached a point of no return. Anil has been criticising the corporate governance practices in Reliance Industries and Reliance Infocomm, companies controlled by Mukesh.

In particular, Anil is unhappy with some share transfers that have taken place after Dhirubhai's death. Meanwhile, Mukesh is upset by Anil's stance over the infusion of funds into the Reliance Infocomm project. Mukesh also objects to Anil's lavish lifestyle, his association with film stars and political ambitions, which he feels are detrimental to the group. The class is asked to discuss three different options which have been suggested by legal experts to settle the matter, and figure out where Dhirubhai had gone wrong. This case brings out the importance of succession planning in family-owned businesses.

Contents:

Key Words:

Corporate governance, Reliance Industries, Ambani brothers, Family business, Family feud, Mukesh Ambani, Anil Ambani, Dhirubhai Ambani, Reliance Infocomm, Reliance Energy, Reliance Capital

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