With the largest worker unions at Bharat Sanchar Nigam Ltd, or BSNL, opposed to a proposed share sale in the state-owned phone firm, Union minister for communications and information technology Andimuthu Raja has offered the company’s more than 300,000 workers stock at Rs10 a share compared with the Rs300-400 he expects it to list at.
The Union government has started the process of selling shares in an initial public offering, or IPO, with BSNL’s board of directors last week approving a share sale of up to 10% equity shares in the company.BSNL is India’s largest phone services firm by sales with revenues of some Rs39,715 crore last fiscal and is projected at Rs50,000 crore by 2010.
“The trade unions have expressed their apprehensions saying that BSNL can be managed better without an IPO and that the employees will suffer. The plans for public listing will be finalized after some round of talks with the employee unions—individually and collectively,” Raja told reporters on Thursday after a first meeting with the unions.
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Each BSNL employee will be offered 500 shares through employee stock option plans, or Esops, at a price of Rs10 each potentially netting each worker up to Rs200,000, the minister said.
BSNL’s director of finance S.D. Saxena said the IPO could take place within six months though investment bankers to the sale had not been appointed.
The worker unions, however, stuck to their stand. V.A.N. Namboodiri, general secretary of BSNL Employees Union, the largest such group at the New Delhi-headquartered firm, said his union would reject the stock option offer and that it remained opposed to the company’s listing.
A second trade union echoed the view. “Even the private companies are not going for IPO now. At present we need to improve the performance of the company,” Thomas K. John, general secretary, Federation of National Telecom Union, said over the phone, adding that an IPO was the first step towards privatization of the state-owned telecom services firm.
‘Each BSNL employee will be offered 500 shares through Esops, at Rs10 each, netting up to Rs200,000.’
Worker unions are powerful at BSNL. Some 13 unions represent 304,000 BSNL employees, but five of six workers are members of four unions. The largest among them are the BSNL Employees Union backed by the Communist Party of India (Marxist); Federation of National Telecom Union, which is supported by Intuc (Indian National Trade Union Congress); National Federation of Telecom Employees, the trade union wing of the Congress-backed Aituc (All India Trade Union Congress); and BMS (Bharat Mazdoor Sangh).
Analysts say union opposition and weak market sentiment—Indian shares have lost a quarter of their value this year, and IPO plans of about $4.1 billion have been deferred—could limit investor appetite for large offers.
“I have some reservations about such a large IPO,” said R.K. Gupta, managing director of Taurus Mutual Fund. “The first thing is they will have tough time in convincing the unions and just think of the kind of impact it would have on the broader market in terms of liquidity.”
In mobile subscribers, BSNL lags Bharti Airtel Ltd—whose market value is about $39 billion (Rs1,634 crore)—Reliance Communications Ltd and unlisted Vodafone Essar, which is controlled by Vodafone Plc.
At the end of June, BSNL had nearly 73 million wireless and fixed-line subscribers, slightly ahead of mobile services leader Bharti Airtel with nearly 72 million users.
In January, Saxena, had said the firm valued itself at $100 billion, and was looking at selling 10% to the public. On Thursday, he said BSNL was “still very aggressive” on the valuation.
In 2004, India raised $2.5 billion by selling a 10% stake in state-run oil producer Oil and Natural Gas Corp. Ltd, a record at the time, and $1.3 billion from a public offer of power producer NTPC Ltd.
They were the last big public offerings by state-run firms.
In a separate decision, the government had decided to compensate BSNL for revenue losses from running rural networks. “We have decided to exempt licence fees on landlines in rural areas, arising out of sharing of adjusted growth revenue (AGR), which will be Rs600-800 crore,” Raja said. Phone firms in India pay between 2% and 7% of gross revenue to the government as licence fees.
The government has, on recommendations from the country’s telecom regulator, decided to compensate BSNL for the losses on access deficit charges or a levy meant to compensate the phone firm for its rural business that was rescinded by the regulator in March.
The firm will be compensated Rs2,000 crore by India’s universal service obligation fund, the minister said.
New Delhi also has approved release of one block of spectrum or airwaves each to BSNL and Mahanagar Telephone Nigam Ltd to help them roll out 3G, or third generation, mobile phone services and have a first-mover advantage over private operators in the country.
Friday, August 8, 2008
Manji’s family waits for birth certificate
Thirteen-Day-Old Manji Yamada’s family said they were expecting her birth certificate on Friday since an application for the same had already been submitted with the Anand municipality in Gujarat on Thursday.
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Supreme Court of India
Japan Visa
The birth certificate may be Manji’s ticket back to her father Dr Yukufusi Yamada in Japan. However, this is possible only if there is cooperation between the Government of India, which has to issue travel documents, and Japanese embassy, which has to grant the visa.
Supreme Court advocate Indira Jaisingh, counsel for the Yamada family, said, “The birth certificate will establish Dr Yamada as the father, following which the Government of India can grant the travel documents. The Japanese embassy needs to grant a visa.” She added that according to the law, Manji would not be an Indian citizen, as neither of her parents is an Indian.
“The father, Dr Yamada is a Japanese citizen, while technically her maternal line cannot be proven. So she cannot be issued a passport,” Jaisingh said.
Dr Sanjay Arya, director of Arya Hospital in Jaipur where Manji is staying with her grandmother Emiko, said there would be no need to move court. “Since Dr Yamada and Emiko were present at the time of her birth, Dr Yamada is the father and Emiko the natural guardian,” Dr Arya said.
Legal experts predict minor hiccups before Manji can be reunited with her father. “The only issue could be the Government of India or the Japanese embassy insisting on proof of parentage. This can be substantiated with a DNA test,” Jaisingh said.
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Supreme Court of India
Japan Visa
The birth certificate may be Manji’s ticket back to her father Dr Yukufusi Yamada in Japan. However, this is possible only if there is cooperation between the Government of India, which has to issue travel documents, and Japanese embassy, which has to grant the visa.
Supreme Court advocate Indira Jaisingh, counsel for the Yamada family, said, “The birth certificate will establish Dr Yamada as the father, following which the Government of India can grant the travel documents. The Japanese embassy needs to grant a visa.” She added that according to the law, Manji would not be an Indian citizen, as neither of her parents is an Indian.
“The father, Dr Yamada is a Japanese citizen, while technically her maternal line cannot be proven. So she cannot be issued a passport,” Jaisingh said.
Dr Sanjay Arya, director of Arya Hospital in Jaipur where Manji is staying with her grandmother Emiko, said there would be no need to move court. “Since Dr Yamada and Emiko were present at the time of her birth, Dr Yamada is the father and Emiko the natural guardian,” Dr Arya said.
Legal experts predict minor hiccups before Manji can be reunited with her father. “The only issue could be the Government of India or the Japanese embassy insisting on proof of parentage. This can be substantiated with a DNA test,” Jaisingh said.
SIMI members remain under watch
Intelligence agencies claimed that former members of banned Students Islamic Movement of India (SIMI) have preferred to remain underground even after the recent decision of the special tribunal of Delhi High Court quashing the ban on them and subsequent Supreme Court's stay on the verdict. The cops too continued their vigil on the activists.
They maintained watch in several areas like Jaffernagar, Chhaoni, Borgaon, Mominpura, Hasanbagh where movement of underground Simi members have been noted. Cops are especially watching areas where former Simi members assembled on certain days. Though most former members are already on cops' radar, some members have really gone underground.
These include Irshad Ahmed, brother of Dr Abrar Arif, who had surrendered earlier in January this year. Imitiyaz, former city treasurer of the banned outfit, also remained underground for around two years before surrendering before court recently. Cops believe the underground members pose a threat. Apart from Nagpur, such vigilance was also kept in Akola, Buldana and Yavatmal districts.
Interrogation of Imitiyaz revealed that the outfit and its underground cadres enjoy support of a wide network of sympathizers. Some of them are also under a watch.
They maintained watch in several areas like Jaffernagar, Chhaoni, Borgaon, Mominpura, Hasanbagh where movement of underground Simi members have been noted. Cops are especially watching areas where former Simi members assembled on certain days. Though most former members are already on cops' radar, some members have really gone underground.
These include Irshad Ahmed, brother of Dr Abrar Arif, who had surrendered earlier in January this year. Imitiyaz, former city treasurer of the banned outfit, also remained underground for around two years before surrendering before court recently. Cops believe the underground members pose a threat. Apart from Nagpur, such vigilance was also kept in Akola, Buldana and Yavatmal districts.
Interrogation of Imitiyaz revealed that the outfit and its underground cadres enjoy support of a wide network of sympathizers. Some of them are also under a watch.
Sunday, August 3, 2008
Al-Qaeda Confirms Death of Chemical Arms Specialist in Pakistan
Al-Qaeda confirmed the death of its chemical and biological weapons specialist Abu Khabab al-Masri, about a week after he was reportedly killed in a missile strike in Pakistan, according to a U.S.-based intelligence group.
Al-Masri trained ``lots of other experts,'' senior al-Qaeda leader Mustafa Abu al-Yazid said in a written statement, according to IntelCenter, based in Alexandria, Virginia. ``He may rest in peace as the succession is guaranteed.''
Also known by the name of Midhat Mursi al-Sayid Umar, the Egyptian had a $5 million bounty on his head and ran terrorist training camps, Agence France-Presse reported.
He was killed by a missile strike July 28 in Pakistan's South Waziristan tribal area, AFP reported at the time, citing unidentified Pakistani security officials.
The al-Qaeda statement, dated July 30, didn't say how al- Masri died, according to IntelCenter, which provides counterterrorism intelligence support to the U.S., British, Australian and Canadian armed forces
Al-Masri trained ``lots of other experts,'' senior al-Qaeda leader Mustafa Abu al-Yazid said in a written statement, according to IntelCenter, based in Alexandria, Virginia. ``He may rest in peace as the succession is guaranteed.''
Also known by the name of Midhat Mursi al-Sayid Umar, the Egyptian had a $5 million bounty on his head and ran terrorist training camps, Agence France-Presse reported.
He was killed by a missile strike July 28 in Pakistan's South Waziristan tribal area, AFP reported at the time, citing unidentified Pakistani security officials.
The al-Qaeda statement, dated July 30, didn't say how al- Masri died, according to IntelCenter, which provides counterterrorism intelligence support to the U.S., British, Australian and Canadian armed forces
Terrorism tops agenda as Karzai arrives in India
While Afghan President Hamid Karzai spent the weekend thundering away at Pakistan and its deepening terrorist roots, India has taken a more measured response. On Sunday night, as Karzai touched down in New Delhi on a state visit, the tone of the visit has been set — terrorism is on top of everybody's agenda.
The difference between Manmohan and Karzai is that while the latter is talking about the Pakistan problem publicly, India has chosen to give the message privately to Pakistani PM Yousaf Raza Gilani. This is because Singh doesn't want to toss the peace process with Pakistan or the ceasefire out of the window.
Nevertheless, the fact remains that the bombing of India's Kabul mission wasn't any ordinary terror attack.
Apart from the identity of the suicide bomber — 22-year-old Hamza Shakoor from Gujranwala district in Pakistan — the intelligence about the imminent attack was remarkably precise, giving a sure indication about the centres of planning and execution.
As information about the attack filters out, it's becoming clear that the damage could have been much greater. The original vehicle that was planned to be used to ram into the Indian embassy was not an SUV but an oil tanker.
In fact, after Afghan and Indian intelligence revealed the Pakistani connection, national security advisor M K Narayanan spoke to his counterparts in Washington to be told the same thing by top US intelligence officials.
When CIA official Stephen Kappes visited Islamabad on a secret trip to tell the Pakistan government that the US knew ISI was behind the Kabul attack, few were aware that he was flying in from Kabul. Both India and the US had shared notes by then on the source and nature of the attack and it was this information that was presented to the Pakistanis.
In the past weeks, what has been unusual is that it has been the US and Afghanistan that have spoken the loudest on Pakistan's involvement in the embassy attack. This has been good for India — because it spreads the credibility net much further.
The US will be pressuring Pakistan a lot more on taming the ISI, and acting on terrorism in the coming weeks and months. The Indian government is unlikely to scale up its rhetoric against Pakistan too much, because it is reluctant to lose the benefits of the peace process so soon.
The difference between Manmohan and Karzai is that while the latter is talking about the Pakistan problem publicly, India has chosen to give the message privately to Pakistani PM Yousaf Raza Gilani. This is because Singh doesn't want to toss the peace process with Pakistan or the ceasefire out of the window.
Nevertheless, the fact remains that the bombing of India's Kabul mission wasn't any ordinary terror attack.
Apart from the identity of the suicide bomber — 22-year-old Hamza Shakoor from Gujranwala district in Pakistan — the intelligence about the imminent attack was remarkably precise, giving a sure indication about the centres of planning and execution.
As information about the attack filters out, it's becoming clear that the damage could have been much greater. The original vehicle that was planned to be used to ram into the Indian embassy was not an SUV but an oil tanker.
In fact, after Afghan and Indian intelligence revealed the Pakistani connection, national security advisor M K Narayanan spoke to his counterparts in Washington to be told the same thing by top US intelligence officials.
When CIA official Stephen Kappes visited Islamabad on a secret trip to tell the Pakistan government that the US knew ISI was behind the Kabul attack, few were aware that he was flying in from Kabul. Both India and the US had shared notes by then on the source and nature of the attack and it was this information that was presented to the Pakistanis.
In the past weeks, what has been unusual is that it has been the US and Afghanistan that have spoken the loudest on Pakistan's involvement in the embassy attack. This has been good for India — because it spreads the credibility net much further.
The US will be pressuring Pakistan a lot more on taming the ISI, and acting on terrorism in the coming weeks and months. The Indian government is unlikely to scale up its rhetoric against Pakistan too much, because it is reluctant to lose the benefits of the peace process so soon.
Oil Rises as Storm Threatens U.S. Output, Iran Misses Deadline
Crude oil rose for a second day as a storm threatened U.S. output in the Gulf of Mexico, and Israeli and U.S. officials sought additional sanctions against Iran.
Tropical Storm Edouard lies about 90 miles (145 kilometers) southeast of the Mississippi River mouth and may strengthen to a hurricane as it heads west toward Texas, the National Hurricane Center said. Oil rose from an 11-week low last week as Iran, accused of developing nuclear weapons, ignored a deadline in its dispute with the United Nations over its uranium research.
``It's that time of the year, and U.S. Gulf production could be in the path of the storm,'' said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. ``Concern about Iran is coming to the fore and supply risks would provide a high floor for prices.''
Crude oil for September delivery rose as much as $1.21, or 1 percent, to $126.31 a barrel in after-hours electronic trading on the New York Mercantile Exchange and traded at $126.22 at 10:25 a.m. in Singapore.
The contract gained 0.8 percent on Aug. 1 on speculation the odds of a military strike against nuclear research facilities in Iran, the world's fourth-largest oil producer, were increasing.
Iran didn't respond by an Aug. 2 deadline to an offer from the U.S., Russia, China, France, the U.K. and Germany of economic and diplomatic incentives in exchange for the suspension of its uranium-enrichment program.
Extra sanctions are needed, Tzipi Livni, Israel's foreign minister, said yesterday on CNN's ``Late Edition'' program.
`Wildcat Factors'
``Those wildcat factors'' are holding up prices today, Gavin Wendt, senior resources analyst at Fat Prophets Funds Management in Sydney, said in a Bloomberg Television interview. ``Prices should be a lot stronger than they were a week ago,'' given the risks from the storm and Iran, he said.
Brent crude oil for September settlement climbed as much as $1.12, or 0.9 percent, to $125.30 a barrel on London's ICE Futures Europe exchange, and traded at $125.19 at 10:12 a.m. in Singapore.
Tropical storm Edouard, with maximum wind speeds of 50 miles an hour, is likely to strengthen as it moves west parallel to the Louisiana coast before making land on the upper Texas coast Aug. 5, the Miami-based hurricane center said at 7 p.m. local time. There is a 24 percent chance it will strengthen to a hurricane, with winds of more than 74 miles an hour, before striking land.
``Keep a close eye on the storm,'' Rebecca Waddington, a meteorologist with the center, said in an interview. ``The industry knows better than we do how to safeguard their installations. I'd advise them to act early.''
Firmer Dollar
New York oil futures have slipped more than $21 a barrel, or 14 percent, from the record $147.27 on July 11 as U.S. gasoline demand slowed, and a firming of the dollar reduced the attraction of commodities as an investment.
Hedge fund managers and other large speculators last week reduced their bets on falling prices, according to Commodity Futures Trading Commission data.
Net-short positions, the difference between orders to buy and sell the commodity, fell to 660 contracts at July 29, 82 percent less than a week earlier.
While the U.S. economy may be heading toward recession, demand in India and China remains strong and global production is straining to keep up, Fat Prophets' Wendt said. He expects oil to reach $175 a barrel before the end of the year.
An Institute for Supply Management report tomorrow will probably show U.S. service industries shrank for a second month in July, based on a Bloomberg survey of economists. Futures trading on the Chicago Board of Trade suggests less than a 7 percent chance the U.S. Federal Reserve will raise interest rates after it meets the same day.
``It's likely that we're going to see further weakness in the dollar,'' Fat Prophets' Wendt said. ``We can't see it bouncing back and sustaining any gains so we're looking toward further increases in the price of crude oil
Tropical Storm Edouard lies about 90 miles (145 kilometers) southeast of the Mississippi River mouth and may strengthen to a hurricane as it heads west toward Texas, the National Hurricane Center said. Oil rose from an 11-week low last week as Iran, accused of developing nuclear weapons, ignored a deadline in its dispute with the United Nations over its uranium research.
``It's that time of the year, and U.S. Gulf production could be in the path of the storm,'' said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. ``Concern about Iran is coming to the fore and supply risks would provide a high floor for prices.''
Crude oil for September delivery rose as much as $1.21, or 1 percent, to $126.31 a barrel in after-hours electronic trading on the New York Mercantile Exchange and traded at $126.22 at 10:25 a.m. in Singapore.
The contract gained 0.8 percent on Aug. 1 on speculation the odds of a military strike against nuclear research facilities in Iran, the world's fourth-largest oil producer, were increasing.
Iran didn't respond by an Aug. 2 deadline to an offer from the U.S., Russia, China, France, the U.K. and Germany of economic and diplomatic incentives in exchange for the suspension of its uranium-enrichment program.
Extra sanctions are needed, Tzipi Livni, Israel's foreign minister, said yesterday on CNN's ``Late Edition'' program.
`Wildcat Factors'
``Those wildcat factors'' are holding up prices today, Gavin Wendt, senior resources analyst at Fat Prophets Funds Management in Sydney, said in a Bloomberg Television interview. ``Prices should be a lot stronger than they were a week ago,'' given the risks from the storm and Iran, he said.
Brent crude oil for September settlement climbed as much as $1.12, or 0.9 percent, to $125.30 a barrel on London's ICE Futures Europe exchange, and traded at $125.19 at 10:12 a.m. in Singapore.
Tropical storm Edouard, with maximum wind speeds of 50 miles an hour, is likely to strengthen as it moves west parallel to the Louisiana coast before making land on the upper Texas coast Aug. 5, the Miami-based hurricane center said at 7 p.m. local time. There is a 24 percent chance it will strengthen to a hurricane, with winds of more than 74 miles an hour, before striking land.
``Keep a close eye on the storm,'' Rebecca Waddington, a meteorologist with the center, said in an interview. ``The industry knows better than we do how to safeguard their installations. I'd advise them to act early.''
Firmer Dollar
New York oil futures have slipped more than $21 a barrel, or 14 percent, from the record $147.27 on July 11 as U.S. gasoline demand slowed, and a firming of the dollar reduced the attraction of commodities as an investment.
Hedge fund managers and other large speculators last week reduced their bets on falling prices, according to Commodity Futures Trading Commission data.
Net-short positions, the difference between orders to buy and sell the commodity, fell to 660 contracts at July 29, 82 percent less than a week earlier.
While the U.S. economy may be heading toward recession, demand in India and China remains strong and global production is straining to keep up, Fat Prophets' Wendt said. He expects oil to reach $175 a barrel before the end of the year.
An Institute for Supply Management report tomorrow will probably show U.S. service industries shrank for a second month in July, based on a Bloomberg survey of economists. Futures trading on the Chicago Board of Trade suggests less than a 7 percent chance the U.S. Federal Reserve will raise interest rates after it meets the same day.
``It's likely that we're going to see further weakness in the dollar,'' Fat Prophets' Wendt said. ``We can't see it bouncing back and sustaining any gains so we're looking toward further increases in the price of crude oil
Friday, August 1, 2008
Oh brother, spare me the time
Demonstrating that avarice often is thicker than blood, two fabulously wealthy Indian brothers are driven by rivalry and mutual hatred, writes Matt Wade.
If the world's 10 richest people stood shoulder to shoulder in order of wealth, two brothers living in the same house in Mumbai would be beside each other, in more ways than one.
Mukesh and Anil Ambani are ranked the fifth- and sixth-richest men in the world with fortunes totalling an estimated $85 billion - about 15 times James Packer's - and they cannot stand each other.
Forbes magazine's global rich list registers them separately because their wealth is not pooled. Rather, the world's richest brothers are feuding rivals who run separate business empires. Their long corporate battle has been "fierce, violent, cruel, bloodthirsty and savage", according to Alam Srinivas, an Indian journalist who for 25 years has covered the Ambani family company, Reliance Industries.
Sibling hostility has not halted the separate enterprises they run, thanks in big part to the booming Indian economy - four of the Forbes top 10 are Indian. But sources close to the brothers fear their acrimonious tussle could soon stunt their businesses and even harm the Indian economy by undermining investor confidence.
"So far the fight has not hurt shareholders [in Reliance companies] at all but it has reached a threshold where it could affect the growth of both groups," says one. "The message being sent the international investment community is to stay clear of these guys."
The brothers' father, Dhirubhai, started as a street trader in Mumbai in the late 1950s and built a company that eventually rivalled the clique of big businesses which had dominated India since the British Raj. His company, Reliance Industries, became a dominant force in India's textile and petrochemical industries and branched into an array of other businesses.
When Dhirubhai Ambani died intestate six years ago, Reliance Industries was one of India's biggest industrial conglomerates but without a clear succession plan. There was an immediate stand-off between the sons for the company chairmanship, and Mukesh prevailed. But late in 2004, Anil let it be known he could not work in his older sibling's shadow, and a bitter seven-month struggle ensued until Dhirubhai's widow, Kokilaben, brokered a deal to divide the empire between her sons.
Mukesh was given control of Reliance's core businesses including petrochemicals, oil and gas, refining, manufacturing and retail. Anil got most of Reliance's newer service businesses, including telecommunications, financial services and power.
Mukesh kept the name Reliance Industries Ltd (RIL) while Anil's share - about a third of the family stake - was named Reliance Anil Dhirubhai Ambani Group (RADAG). Despite their differences, Mukesh and Anil live with their families on separate floors of the same 18-storey house, Sea Wind, in southern Mumbai.
Insiders say they never talk and rarely cross paths, only partly because of the different hours they keep. Anil tends to get to work by 9.30am and puts in a 12-hour day. About three mornings a week he takes a helicopter to his offices at Reliance Communications in Navimumbai, a satellite city of Mumbai. Mukesh normally starts work at his downtown headquarters after 11am and finishes by midnight.
The family's living arrangements will soon change because Mukesh is building a vast house overlooking the Arabian Sea on Mumbai's exclusive Altamount Road. The Australian builder, Leighton Holdings, won the original contract and began construction but is no longer associated with the project. It is understood Mukesh's 27-storey house, to be named Antilla, will have a helipad, six-floor car park, a health club with a yoga studio, and an entertainment centre with a 50-seat theatre.
Mukesh's wife, Nita, reportedly arranged for an ice room where residents and guests can escape the Mumbai heat in a cool chamber "dusted by man-made snow flurries". Some estimates put the house's probable cost at up to $2 billion.
The extravagance of the house is in keeping with Mukesh Ambani's birthday gift last year to his wife - a luxuriously appointed Airbus 319 jetliner. This year he paid $112 million for the Mumbai Indians cricket team, which competed in the hugely popular Twenty20 Indian Premier League.
Anil's wife, Tina, a former Bollywood star, has also been shopping. She reportedly ordered a yacht for $49 million.
The Ambani brothers are vegetarian teetotallers who share a love of movies - but they have contrasting styles.
Mukesh studied chemical engineering and was a diligent technocrat. His father directed him to management of big projects. Mukesh has remained mostly behind the scenes but has taken a more public role recently.
The flashier Anil studied management at the renowned Wharton Business School in the US and was later given responsibility for Reliance's marketing and fund-raising. He developed a reputation for financial innovation, one of the hallmark's of Reliance's success.
Anil is well connected with Mumbai's glitterati and close to the family of Amitabh Bachchan, the Bollywood superstar. Anil has been linked with several Bollywood starlets over the years and married Tina Munim, a controversial actress with whom he has two children. His parents are understood to have opposed the union strongly.
Well before Dhirubhai's death, there were signs his two very different sons could not manage the Reliance empire together. But no one seems to have expected the rancour that now exists between them.
Alam Srinivas believes the animosity is so deeply rooted there is little chance of reconciliation. "These days the Ambani versus Ambani battle is more intense, more aggressive, more below-the-belt and more virulent than ever," he says. "This fight is unlikely to end."
Under the deal that split Reliance, each brother was prohibited from competing directly with the established businesses of the other for 10 years. But war was almost immediate. An early dispute raged over the price of gas that one of Mukesh's projects was meant to supply to Anil's Reliance Natural Resources at a fixed rate. The matter is in court.
This year the brotherly conflict has become especially bitter. In January, sharemarket traders suspected Mukesh associates of engineering an embarrassing 17 per cent fall in the share price of Anil's Reliance Power immediately after its initial public offering. It was the biggest fall so far in Indian corporate history. The charge is hotly denied.
In June, Mukesh in effect torpedoed a bid by Anil to pull off a complex merger with the South African telephone company MTN. "Ambani brothers at war again," said the Times of India headline.
Last month, the Ambani feud impinged directly on Indian national politics. The Government was seeking the support of several minor political parties after its parliamentary majority was tested when left-wing support evaporated over the decision to press ahead with a nuclear co-operation agreement with the US.
Amar Singh, a politician close to Anil Ambani, emerged with considerable government influence after his Samajwadi Party threw its weight behind the government. Mukesh Ambani and the Indian Prime Minister, Manmohan Singh, met just days before the parliamentary confidence vote, triggering speculation that Mukesh had sought assurances that his own interests would not be damaged and that his brother would get no special treatment.
"Now politicians have a real problem because they know both the brothers are equally strong," says Srinavas.
The family's single-generation rise from relative poverty to immense wealth is credited with inspiring a new generation of entrepreneurs, some now leading India's renowned information technology industry. "They have taught every other business house in India to think big and think globally," says Srinivas.
It is alleged also that the Ambanis pioneered brash and aggressive political lobbying to win commercial and regulatory favours. "Unlike other business families who would use their clout in a covert way, the Ambanis used it openly and brazenly," says Srinivas.
Suppression of The Polyester Prince, a book on Dhirubhai Ambani by the Herald journalist, Hamish McDonald, illustrates the family's clout. Published in 1998, McDonald's book is a rare study of one of emerging Asia's new tycoons. It also details the many allegations of corruption levelled against Dhirubhai Ambani during his rapid corporate ascent.
The Indian publisher, HarperCollins India, had the book printed and ready for binding but it pulled out when Reliance threatened to apply in each of India's 22 high courts for injunctions stopping publication on the grounds of anticipated defamation. The printed pages were soon pulped. The Australian publisher Allen & Unwin was not sued, and an updated edition is being written.
"They were scared off, essentially," says McDonald of the Indian publisher.
Mukesh Ambani does not deny Reliance exerts influence, but he plays down its importance as a business strategy. "I still think that's not a critical success factor," he told the New York Times in a recent interview.
One critical success factor for the brothers has been the stellar performance of the Indian economy. India's growth last financial year accelerated to 9.1 per cent after several years at about 8 per cent. Meanwhile, the giant Ambani businesses have lifted their share of that booming economy, accounting now for about 5 per cent of India's economic output, compared with 2 per cent three years ago. Before the conglomerate was split, its market value was $US22.5 billion; collectively, the companies are now worth $US170 billion ($181.4 billion).
The Forbes rich list, published in March, estimates Anil's personal fortune grew by $US23.8 billion - more than anyone else on the planet. He jumped from 18th to sixth during the year, while Mukesh's net worth jumped by $US22.9 billion.
Some believe the sibling fights are driven, at least in part, by rivalry over who gets higher on the Forbes list. "It is essentially a competition to see who can be richer," says a source close to the family.
Matt Wade is the Herald's New Delhi correspondent.
If the world's 10 richest people stood shoulder to shoulder in order of wealth, two brothers living in the same house in Mumbai would be beside each other, in more ways than one.
Mukesh and Anil Ambani are ranked the fifth- and sixth-richest men in the world with fortunes totalling an estimated $85 billion - about 15 times James Packer's - and they cannot stand each other.
Forbes magazine's global rich list registers them separately because their wealth is not pooled. Rather, the world's richest brothers are feuding rivals who run separate business empires. Their long corporate battle has been "fierce, violent, cruel, bloodthirsty and savage", according to Alam Srinivas, an Indian journalist who for 25 years has covered the Ambani family company, Reliance Industries.
Sibling hostility has not halted the separate enterprises they run, thanks in big part to the booming Indian economy - four of the Forbes top 10 are Indian. But sources close to the brothers fear their acrimonious tussle could soon stunt their businesses and even harm the Indian economy by undermining investor confidence.
"So far the fight has not hurt shareholders [in Reliance companies] at all but it has reached a threshold where it could affect the growth of both groups," says one. "The message being sent the international investment community is to stay clear of these guys."
The brothers' father, Dhirubhai, started as a street trader in Mumbai in the late 1950s and built a company that eventually rivalled the clique of big businesses which had dominated India since the British Raj. His company, Reliance Industries, became a dominant force in India's textile and petrochemical industries and branched into an array of other businesses.
When Dhirubhai Ambani died intestate six years ago, Reliance Industries was one of India's biggest industrial conglomerates but without a clear succession plan. There was an immediate stand-off between the sons for the company chairmanship, and Mukesh prevailed. But late in 2004, Anil let it be known he could not work in his older sibling's shadow, and a bitter seven-month struggle ensued until Dhirubhai's widow, Kokilaben, brokered a deal to divide the empire between her sons.
Mukesh was given control of Reliance's core businesses including petrochemicals, oil and gas, refining, manufacturing and retail. Anil got most of Reliance's newer service businesses, including telecommunications, financial services and power.
Mukesh kept the name Reliance Industries Ltd (RIL) while Anil's share - about a third of the family stake - was named Reliance Anil Dhirubhai Ambani Group (RADAG). Despite their differences, Mukesh and Anil live with their families on separate floors of the same 18-storey house, Sea Wind, in southern Mumbai.
Insiders say they never talk and rarely cross paths, only partly because of the different hours they keep. Anil tends to get to work by 9.30am and puts in a 12-hour day. About three mornings a week he takes a helicopter to his offices at Reliance Communications in Navimumbai, a satellite city of Mumbai. Mukesh normally starts work at his downtown headquarters after 11am and finishes by midnight.
The family's living arrangements will soon change because Mukesh is building a vast house overlooking the Arabian Sea on Mumbai's exclusive Altamount Road. The Australian builder, Leighton Holdings, won the original contract and began construction but is no longer associated with the project. It is understood Mukesh's 27-storey house, to be named Antilla, will have a helipad, six-floor car park, a health club with a yoga studio, and an entertainment centre with a 50-seat theatre.
Mukesh's wife, Nita, reportedly arranged for an ice room where residents and guests can escape the Mumbai heat in a cool chamber "dusted by man-made snow flurries". Some estimates put the house's probable cost at up to $2 billion.
The extravagance of the house is in keeping with Mukesh Ambani's birthday gift last year to his wife - a luxuriously appointed Airbus 319 jetliner. This year he paid $112 million for the Mumbai Indians cricket team, which competed in the hugely popular Twenty20 Indian Premier League.
Anil's wife, Tina, a former Bollywood star, has also been shopping. She reportedly ordered a yacht for $49 million.
The Ambani brothers are vegetarian teetotallers who share a love of movies - but they have contrasting styles.
Mukesh studied chemical engineering and was a diligent technocrat. His father directed him to management of big projects. Mukesh has remained mostly behind the scenes but has taken a more public role recently.
The flashier Anil studied management at the renowned Wharton Business School in the US and was later given responsibility for Reliance's marketing and fund-raising. He developed a reputation for financial innovation, one of the hallmark's of Reliance's success.
Anil is well connected with Mumbai's glitterati and close to the family of Amitabh Bachchan, the Bollywood superstar. Anil has been linked with several Bollywood starlets over the years and married Tina Munim, a controversial actress with whom he has two children. His parents are understood to have opposed the union strongly.
Well before Dhirubhai's death, there were signs his two very different sons could not manage the Reliance empire together. But no one seems to have expected the rancour that now exists between them.
Alam Srinivas believes the animosity is so deeply rooted there is little chance of reconciliation. "These days the Ambani versus Ambani battle is more intense, more aggressive, more below-the-belt and more virulent than ever," he says. "This fight is unlikely to end."
Under the deal that split Reliance, each brother was prohibited from competing directly with the established businesses of the other for 10 years. But war was almost immediate. An early dispute raged over the price of gas that one of Mukesh's projects was meant to supply to Anil's Reliance Natural Resources at a fixed rate. The matter is in court.
This year the brotherly conflict has become especially bitter. In January, sharemarket traders suspected Mukesh associates of engineering an embarrassing 17 per cent fall in the share price of Anil's Reliance Power immediately after its initial public offering. It was the biggest fall so far in Indian corporate history. The charge is hotly denied.
In June, Mukesh in effect torpedoed a bid by Anil to pull off a complex merger with the South African telephone company MTN. "Ambani brothers at war again," said the Times of India headline.
Last month, the Ambani feud impinged directly on Indian national politics. The Government was seeking the support of several minor political parties after its parliamentary majority was tested when left-wing support evaporated over the decision to press ahead with a nuclear co-operation agreement with the US.
Amar Singh, a politician close to Anil Ambani, emerged with considerable government influence after his Samajwadi Party threw its weight behind the government. Mukesh Ambani and the Indian Prime Minister, Manmohan Singh, met just days before the parliamentary confidence vote, triggering speculation that Mukesh had sought assurances that his own interests would not be damaged and that his brother would get no special treatment.
"Now politicians have a real problem because they know both the brothers are equally strong," says Srinavas.
The family's single-generation rise from relative poverty to immense wealth is credited with inspiring a new generation of entrepreneurs, some now leading India's renowned information technology industry. "They have taught every other business house in India to think big and think globally," says Srinivas.
It is alleged also that the Ambanis pioneered brash and aggressive political lobbying to win commercial and regulatory favours. "Unlike other business families who would use their clout in a covert way, the Ambanis used it openly and brazenly," says Srinivas.
Suppression of The Polyester Prince, a book on Dhirubhai Ambani by the Herald journalist, Hamish McDonald, illustrates the family's clout. Published in 1998, McDonald's book is a rare study of one of emerging Asia's new tycoons. It also details the many allegations of corruption levelled against Dhirubhai Ambani during his rapid corporate ascent.
The Indian publisher, HarperCollins India, had the book printed and ready for binding but it pulled out when Reliance threatened to apply in each of India's 22 high courts for injunctions stopping publication on the grounds of anticipated defamation. The printed pages were soon pulped. The Australian publisher Allen & Unwin was not sued, and an updated edition is being written.
"They were scared off, essentially," says McDonald of the Indian publisher.
Mukesh Ambani does not deny Reliance exerts influence, but he plays down its importance as a business strategy. "I still think that's not a critical success factor," he told the New York Times in a recent interview.
One critical success factor for the brothers has been the stellar performance of the Indian economy. India's growth last financial year accelerated to 9.1 per cent after several years at about 8 per cent. Meanwhile, the giant Ambani businesses have lifted their share of that booming economy, accounting now for about 5 per cent of India's economic output, compared with 2 per cent three years ago. Before the conglomerate was split, its market value was $US22.5 billion; collectively, the companies are now worth $US170 billion ($181.4 billion).
The Forbes rich list, published in March, estimates Anil's personal fortune grew by $US23.8 billion - more than anyone else on the planet. He jumped from 18th to sixth during the year, while Mukesh's net worth jumped by $US22.9 billion.
Some believe the sibling fights are driven, at least in part, by rivalry over who gets higher on the Forbes list. "It is essentially a competition to see who can be richer," says a source close to the family.
Matt Wade is the Herald's New Delhi correspondent.
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