Indian tycoon Anil Ambani has extended an olive branch to his brother to settle an ugly feud stemming from a family pact splitting their corporate empire but his overture has been rebuffed. After firing nearly daily volleys at his older brother Mukesh Ambani, Anil invoked "divine blessings" ahead of Diwali, the Festival of Lights and a key event on the Hindu calendar, and announced he wanted a reconciliation.
In a statement he said was made with a "generous heart", Anil, 50, declared at the weekend, following a religious pilgrimage, that a settlement would be a present for their ageing mother. But Mukesh, 52, said he found it hard to believe that his brother had undergone a "real change of heart" and sincerely wanted an end to the mud-slinging corporate soap opera that has riveted the nation.
Analysts on Monday dismissed the peace overture as a public relations gimmick even as shares of firms controlled by the billionaire siblings rose on hopes they would make up. Anil's offer came just over a week before India's Supreme Court is to hear the brothers' dispute which centres on a natural gas contract involving output from India's most important gas field, the Krishna-Godavari basin. Mukesh said in a statement issued through his company, Reliance Industries Ltd, that he welcomed the change from what he called the "negative" campaign Anil had waged.
But the dispute "can now only be decisively resolved by a decision of the highest court," he said. The issue "transcends any private differences between two brothers", Mukesh said. The Supreme Court is to open hearings in the case October 20. The seeds of the feud lie in a deal between the brothers slicing up the Reliance telecoms-to-energy empire built by their rags-to-riches father Dhirubhai Ambani, who died in 2002 leaving no will. In the 2005 family pact, Mukesh agreed to sell 28 million cubic metres of gas per day to his brother's energy company at a price of 2.34 dollars per million British thermal unit (mBtu) for 17 years.
That is now 44 percent below the government-set price and Mukesh's Reliance Industries insists the deal stipulated the supply of gas was subject to "approval by the government". Billions of dollars are at stake. The row is "far too contentious and it will require a major climbdown by one group for any settlement to work", noted India's Economic Times newspaper.
The surprise peacemaking gesture came after Anil placed a series of newspaper advertisements accusing his brother of "corporate greed" and saying if he had to pay a higher price for the gas, customer fuel bills could jump 50 percent. Most puzzling, said Reliance Industries in its reply late Sunday, is that Anil chose to make his peace offering through "the public domain when he could have easily contacted his elder brother directly".
"This is a PR-media exercise," said Apurva Shah, head of research at Prabhudas Lilladher brokerage. "The dispute involves core business interests and cannot be decided on sentiment or emotion." The battle is the latest in a series between the brothers. Last year, Mukesh blocked a blockbuster merger being negotiated by Anil with South African telecom giant MTN to create an emerging-market telecoms behemoth.