Settlement: It’s a long slog ahead

While the pressure to settle is intensifying, so are the expectations for an early carving up of the Ambani empire. Various directors in the Reliance group companies go to the extent of predicting a positive outcome in a month’s time. Given the public posturing last week by both brothers, it seems more likely that it’s going to be a long slog ahead.

By the end of this week, the valuation of the Ambani empire will be complete, though it is unlikely that we will be any the wiser about what the final big number is. As the settlement exercise slips into the hard-nosed negotiation stage, information is expected to be restricted to key family members.

According to sources close to Anil, the new formula they are presenting is that the group is split according to functions — manufacturing and retailing. In other words, Reliance’s manufacturing operations — RIL and IPCL — would go to Mukesh, who has reiterated that he will never give up or carve up the parent company.

Then, according to this formula, the consumer-driven arms of the Reliance empire — Reliance Infocomm, Reliance Energy, and Reliance Capital — would go to Anil. While the Mukesh camp is now admitting that a settlement process is underway, it continues to reject outright any formulae.

The fact that Anil Ambani continues to raise corporate governance issues — including potentially-damaging revelations about Reliance Industries subsidary Reliance Communiation Infrastructure Ltd (RCIL) — does not indicate that a settlement is around the corner. The Anil camp argues that such issues in the group will continue to be raised as ‘‘it is the right thing to do’’.

It remains to be seen how well that goes down when the two brothers finally meet across the negotiating table.