 | « Back to article | Print this article |
It was no ordinary battle and required someone mightier than the two Ambanis to resolve the matter. In stepped Kokilaben, widow of late Dhirubhai Ambani, who rolled out a peace plan and got her sons to accept it on June 18.
The dispute generated considerable interest in the country, where only 25 million of the over one billion people are estimated to hold shares, so much so that the media devoted 1,370 minutes on prime-time television on the seething fight.
At one point of time even senior ministers in the government appealed to the siblings to resolve their differences.
As per the settlement announced by the Ambani family matriarch, Mukesh got flagship petrochemical company Reliance Industries as well as IPCL, while Anil got Reliance Infocomm, Reliance Energy and Reliance Capital.
Post-division, the brothers worked out a demerger scheme, which crossed the last hurdle early this month, when the Bombay High Court put its stamp of approval on it.
Another family feud that was played in full public view was the one between the Nandas. Escorts chief Rajan Nanda's decision to sell Escorts Heart Institute to Ranbaxy's Fortis Healthcare in a Rs 585-crore (Rs 5.85 billion) deal enraged younger brother Anil, who moved the Delhi High Court to stall the deal and restore the hospital's status to that of a charitable entity. "I have moved the court because the institute was supposed to be a charitable trust. And even after converting it into a limited liability company, a sale is illegal since it is misuse of public funds.
"I call it misuse because they will be using the money to clean the financial mess... I will continue my fight. There is no question of withdrawing my case," Anil said. The matter is still in courts and whatever be the outcome, it again brought to fore the struggles in family-run businesses.
But if some family dispute deserves the title of 'corporate shocker of the year', the Mafatlals would certainly win hands-down. The Mafatlals, facing troubled times on the business front, shot back to the spotlight with the news of sex change of one of the siblings.
The family, embroiled in a bitter property dispute over the sprawling 10,000 sq ft flat at Altamount Road in Mumbai, was in news when reports came in, rather late, about Aparna, one of the daughters of late Yogindra Mafatlal, undergoing sex change to gain access to the flat.
Now christened Ajay Mafatlal, the 48-year-old Mafatlal scion, has denied that he took the step (in November 2003) for control of the property. "I haven't changed my sex for the property. I had the mannerisms of a boy since I was six years old and underwent the change for personal reasons," he said.
Moving away from disputes in corporate families, 2005 was also a year that saw many Indian corporates consolidate their positions and on the policy side, hectic efforts were made by the government to come out with a new Companies Act.
Talking about consolidation, UB group chairman Vijay Mallya took steps to consolidate his spirits business after finally acquiring rival Shaw Wallace & Co. in a Rs 1,300 crore (Rs 13 billion) deal.
The $2 billion UB group announced that it would bring its widespread liquor business under one single entity 'United Spirits' and list the same by March 2006.
"We will merge all our spirits companies into one and will complete the process by March 2006. By this time we will finish everything, restructuring and rationalisation of the group's business and brands," Mallya said.
The company is now in the process of floating two initial public offerings of about $200 million each to fund its aviation venture and retire debt in United Spirits.
The Birlas also went into a restructuring drive aimed at infusing investments in high-growth businesses and synergising financial operations. The Rs 30,000 crore (Rs 300 billion) Aditya Birla group decided to merge Ind-Gulf Fertilisers and Birla Global Finance into Indian Rayon to form a new entity 'Aditya Birla Nuvo'.
"This is a step forward into value creation for stakeholders of all the three companies," group chairman Kumar Mangalam Birla said.
The diversified Tata group was not missing in action either, committing as much as Rs 4,120 crore (Rs 41.20 billion) for funding its drive to grow globally. The group went into overdrive on the acquisitions front, with companies like TCS, Tata Chemicals, Tata Steel and Tata Motors picking up stakes in companies abroad.
On the telecom side, where the government this year hiked foreign investment limit up to 74 per cent from 49 per cent, Bharti Televentures paved the way for entry of global biggie Vodafone into India.
The UK-based Vodafone, Europe's largest cellphone company, bought a near 10 per cent stake in Bharti, the largest mobile operator of the country which runs its service under the Airtel brand, in a deal worth around $1.5 billion.
"We are delighted to have Vodafone as our additional partner to further develop the Indian telecom market," said Bharti chief Sunil Mittal.
On the IT side, Dutch banking giant ABN Amro's $400 million outsourcing deal was one of the highlights of 2005. The growing prowess of Indian IT services companies to handle big-ticket deals was in sharp focus as both TCS and Infosys shared the honours, bagging one of their biggest deals.
The closing of the year also saw global FMCG giant Unilever reworking its strategy towards its Indian subsidiary Hindustan Lever Ltd. Significantly, after nearly 50 years, the company decided to bring in an expatriate to head HLL, appointing Douglas Baillie as managing director and CEO with effect from March 2006. Stephen Turner was Lever's first expat chairman appointed in the 1950s.
HLL also decided that Arun Adhikari, currently managing director at HLL and looking after the home and personal care division, will be moving over to Japan as chairman, Unilever Japan.
"India and Japan are key to our long-term sustained growth in the region. I believe that these two appointments will provide a renewed strategic thrust to these businesses. Both appointments reflect Unilever's commitment to enriching and widening international exposure of our leadership," Unilever Asia and Africa president and HLL chairman Harish Manwani said.
Meanwhile, the tussle between the Birlas and R S Lodha over control of the Rs 5,000 crore (Rs 50 billion) empire of M P Birla reached the Supreme Court in August when the Lodha group approached it, challenging a Calcutta High Court order, dismissing their petition seeking quashing of a criminal case filed against them by a Birla group employee.
Even as the order is reserved in the apex court on this count, the two groups are engaged in legal battles in other places like the Company Law Board.
But one of the issues that became a major area of concern for corporate India in 2005 was market regulator SEBI's insistence that half the board of a company should comprise of independent directors, in line with revised Clause 49 listing agreement, by December 31.
The confusion was confounded when the Irani Committee, set up by the Ministry of Company Affairs to help in drafting a new Companies Act, recommended that only one-third of the board need to be filled by independent directors.
With SEBI unrelenting on its stand and the ministry, which is yet to place the Bill for a new Act, clarifying that sectoral regulators were free to prescribe adequate limits, the issue seems to have died down and the corporates are now gearing up to comply with the new stipulation from the New Year.