Ambani family reunion unlikely, says expert

Reconciliation between brothers Mukesh and Anil Ambani, who split the Indian family business founded by their father, is highly unlikely despite speculation that a truce is on the cards, according to a leading academic.

“Business links” between Mukesh, who heads up Reliance Industries, and his younger brother Anil, who leads Reliance Group, will not be developed, reckons Kavil Ramachandran of the Indian School of Business.

“This is not out of animosity and feelings of revenge, but out of a realisation that they are quite different individuals who have chosen to create their destiny independently,” Ramachandran, the Thomas Schmidheiny chair professor of family business and wealth management, told CampdenFB.

His comments come on the back of a recent loan taken by Anil from Chinese banks – Reliance Communications, the telecommunication division of Anil’s indebted conglomerate, will use the $1.2 billion (€922 million) loan to repay debt due at the beginning of March.

On the other hand, his brother Mukesh, whose family-controlled company’s interests include oil, gas and petrochemicals, is sitting on a large cash reserve. In the quarter ending September 2011, Reliance Industries had a cash balance of around $14 billion.

But Ramachandran said he didn’t expect any financial tie-up between the Ambani brothers. “From Anil’s angle – he might not prefer that option which would indirectly mean that he is much less capable than his elder brother in the public eye.”

“Besides, Mukesh always has new growth plans and must be creating a cash chest for some major acquisition or green field investment.”

The billionaire brothers, well known as consummate dealmakers, split the conglomerate founded by their father Dhirubhai Ambani, in 2005 following a public feud.

Mukesh, who owns a 27-floor billion-dollar house in the heart of Mumbai, has an estimated fortune of $27 billion, according to Forbes, while Anil is worth around $9 billion.

Earlier efforts by their mother, Kokilaben, to broker a truce between the feuding brothers did not lead to long-term reconciliation. “They have matured after the split and would prefer to avoid any business connections with each other,” reckons Ramachandran.

Both businesses did not respond to requests for comments.