When will the Ambani war end?

The extended silence from the Ambani brothers suggests that the truce declared some weeks ago is holding, and that a settlement of succession issues in the Reliance group may be reached soon.

The grapevine talks of two or three outstanding issues that are still to be sorted out, but matters may have reached the stage where the two brothers can only go forward, not back.

However, given the intricate nature of cross-holdings, dividing the group into two roughly equal halves cannot be a simple matter, with tax issues presumably adding to the complications.

One must assume though that a broadly acceptable settlement will emerge, helped by the independent valuation exercise that has been done, leaving the brothers to settle their differences and go their separate ways, and then to prove their mettle in the undeclared business rivalry that is bound to ensue.

All this is part of the usual welter of issues in a business family when it comes to settling succession issues, and it is possible that a split will unleash new energies so that both sub-groups end up doing better than the unified-but-divided group may have done.

What makes this particular case different, other than in the sheer size of the businesses and therefore money involved, is the series of public policy and public interest issues that have been raised by the disclosures of the last five months.

And it will be informative to watch how those issues are settled. The questions will particularly concern Anil Ambani, for it was he who raised issues of corporate governance and public interest.

Was that concern genuine, or was it merely tactical play to bring brother Mukesh to the negotiating table, or a combination of both?

For instance, Anil Ambani had raised questions regarding the valuation of Reliance Infocomm, when Mukesh had sought to convert into equity shares money given by Reliance Industries to Infocomm.

With Infocomm now set to go to Anil, will it be valued anywhere near the level that Mukesh had stated, or will valuation drop precipitously? If the earlier valuation favoured by Mukesh sticks, will that be fair to the general body of Reliance shareholders (and Anil had argued it would not)?

If not, how will the outstanding RIL money given to Infocomm be treated? If Anil's old position stays unchanged, the conversion of this money into equity will have to take place at or close to par value.

Not only will that result in RIL holding the bulk of Infocomm's shares, it would mean a huge climbdown by Mukesh, who has a substantial personal stake in Infocomm.

In the interest of corporate governance, will RIL shareholders be given a full explanation of whatever transaction is worked out?

Then there is the question of the RIL shares held in a trust, for the general benefit of all the company's shareholders--another of the issues that Anil had raised after these had been shown in company filings as being part of the holdings of promoters/persons acting in concert.

Anil had demanded that these shares be encashed in some form and the money given to RIL shareholders, to whom the benefit should go, in line with past promises.

Will that be done, or in the family settlement will those shares now be treated as part of Mukesh's holding? Either way, will the general body of RIL shareholders get an explanation of how the issue has been resolved?

Among the numerous other issues that had been raised, there is the question of whether Infocomm shares meant to be given to employees will reach their intended beneficiaries or not; the issue of multiple investment and holding companies being used to mask transactions that, in the ultimate analysis, are funded by a listed and publicly held company and whether holding and operating structures will become more transparent; the issue of independent directors and whether they really have an independent voice, or whether they are compromised by relationships that generate a conflict of interest; and much else.

Public memory is short, but not so short that these issues will not be in people's minds when the settlement is eventually announced.

All those who have goodwill for the Ambani family will hope that matters are indeed amicably resolved, but the history of this particular case will raise one other angle that should wisely not be ignored by the principal actors.