Ambani cos under the spotlight

The 8216;ownership issue8217; between the Ambani brothers has brought into focus 14 investment companies and 8216;persons acting in conce...

The 8216;ownership issue8217; between the Ambani brothers has brought into focus 14 investment companies and 8216;persons acting in concert8217; which hold 34.04 per cent stake in the Rs 74,000 crore Reliance Industries 8212; the flagship of the Rs 99,000 crore Reliance group.

8216;8216;The person who controls these investment companies will have an edge. But it may not be a tough thing to split the holding in these companies between the two brothers equally,8217;8217; said a top investment banker.

Significantly, the shareholding pattern available with the Bombay Stock Exchange says these investment firms are 8216;persons acting in concert8217; with the promoters. Persons acting in concert are usually investment companies of promoters, associates and sister companies.

The group has used the surplus cash in Reliance Industries to invest in other companies like Reliance Energy, IPCL and Reliance Infocomm. While promoters directly hold 12.63 per cent stake in the total promoter holding of 46.67 per cent RIL, the balance is held by these 14 investment companies and persons acting in concert.

On the other hand, Indian mutual funds and financial institutions hold only 14.36 per cent stake in the company with LIC holding the maximum of 4.44 per cent stake.

Out of 14 investment companies, only six have the Reliance tag in their names. Among others, Sanchayita Mercantile owns nearly 2.45 per cent stake in the company.

It is through this complex web of companies that Dhirubhai held his stake in Reliance Industries. Most of these companies hold less than 2 per cent stake in India8217;s largest company. None of these companies are listed, hence very few details are available in the public domain.

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Also, the cross-holdings and direct holdings of these companies make it very difficult to track down the exact owner of the company. 8216;8216;Though both brothers have some direct and equal ownership of Reliance, it will be the owners of these companies which will play an important role,8217;8217; said an investment banker. Also financial institutions, led by the Life Insurance Corporation LIC which hold over 14 per cent stake in RIL, will have to take a stand.