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Last Updated: Friday, 24 December, 2004, 09:40 GMT
Stock off-load eases Ambani feud
Mukesh Ambani
Mukesh Ambani - is this a concession or a bargaining ploy?
A feud between the two brothers who run India's largest private firm, Reliance, may be eased by the elder brother's decision to off-load some stock.

Mukesh Ambani gave up a 12.01% stake in mobile phone firm Reliance Infocomm.

The war of words began last month when he said there were "ownership issues" with younger brother, Anil, hitting the value of shares.

Reliance's stock price has since recovered, and news of the Infocomm annulment pushed it up on Friday.

Reliance Infocomm is India's leading cell phone provider.

The annulment of shares move has raised hopes of reconciliation
Jaspreet Singh, analyst

Mukesh Ambani's stake was regarded as a "sweat equity" - a tranche of shares received at a discounted market price.

Anil Ambani was reported to be unhappy with the arrangement.

Reliance issued a statement on Thursday, saying: "For the last few weeks, a sustained campaign is being carried out about the acquisition of 500m Reliance Infocomm shares at face value by Mukesh Ambani.

"(Mukesh) Ambani has sought annulment of this transaction and his request has been accepted by the board of Reliance Communications Infrastructure Limited."


Analysts are unsure whether this will help end the brothers' differences or whether Mukesh is seeking a bargaining chip to force Anil to yield influence in other areas, particularly Reliance Energy.

Anil Ambani
Anil is more flamboyant and has political ambitions

However, one senior equity analyst, Jaspreet Singh, told the Times of India the move was "a very positive development".

"The tension between the brothers may ease somewhat... the annulment of shares move has raised hopes of reconciliation ahead of the crucial company board meeting next week."

The feud has dominated the news for the past month in India

Mukesh, 47, and Anil, 45, have run the conglomerate since their father's death, intestate, in July 2002.

Reliance spans textiles, telecommunications, petrochemicals, petroleum refining and marketing, oil and gas exploration, insurance and financial services among other areas.

The industrial empire includes India's largest - and the world's fifth largest - petroleum refinery.

Mukesh and Anil are contrasting figures, the former conservative, the latter more flamboyant and with political ambitions.

While the differences between the siblings have long been discussed in corporate circles, it was only last month the spat came out into the open.

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