beyondbrics

The very public reunion of India’s billionaire Ambani brothers on Wednesday could not have come at a better time. Neither will be sorry to see the back of 2011 after a tough year that saw the pair moving toward cooperation.

The brothers, after a rare pronunciation by their peacemaker mother that the family was “united”, arrived in Chorwad – the village in Gujarat where their father grew up – to celebrate of the 80th birthday of the late father whose business empire they tore apart in a bitter public feud.

With so public a display, it was speculated, the brothers may be inching ever closer to reconciling their differences and, perhaps, stitching Dhirubhai Ambani’s empire back together. Never mind that most of the grainy images from the festivities show the brothers standing apart or looking in different directions, the brothers, after nine years, are together again!

Younger Anil has had a rough 2011: it began with his agreement not to trade in equities over charges that his group misrepresented its end-of-year financial statements and violated overseas borrowing rules. It ended with the revelation that Anil’s Reliance Group used a Mauritius-based fund to make covert investments in one of its own companies, as the FT reported. In between, a number of his company’s senior executives were jailed in the multibillion-dollar telecoms scandal that has rocked the subcontinent.

Elder Mukesh seemed to be doing much better: his Reliance Industries began the year with a $7.2bn joint venture with the UK’s BP. Then he took a seat on the board of Bank of America, RIL reported its highest-ever quarterly net profits in its refining and petrochemicals business, and he struck a deal with Disney for next-generation mobile web content.

However, Mukesh also endured questions about when he would finally deliver on RIL’s immense potential, and ended the year embroiled in a fight with the government over the productivity of the very gas fields BP’s investment was supposed to boost – which is seeming more boondoggle than boon with each passing, low-productivity day.

As for the festivities, there was the erection of a memorial to the late Ambani patriarch and some run-of-the-mill awkward family dancing (even billionaires, it seems, cannot avoid family function dancefloors).

If the brothers weren’t getting the hint from their mother’s comments on Tuesday, or the rampant media speculation that some form of reconciliation was expected, a speech by the family’s guru drove the point home. The subject? The importance of “family values, father-son relationship, responsibilities of the sons and harmony among family members”.

Whether Anil and Mukesh felt the broterly love in Chorwad remains to be seen, but it was clear Thursday that the markets had not.

After a 5.3 per cent jump on Wednesday’s open, Anil’s Reliance Communications lost 4.8 per cent on Thursday. Mukesh’s RIL opened down nearly 1 per cent on Wednesday; by Thursday, India’s largest private-sector company had hit its lowest point since March 2009.

Related reading:
Ambanis: mixed fortunes, beyondbrics
[video] War and peace: Ambani brothers
Ambanis: being brothers means never having to say you’re sorry, beyondbrics
Succession pains make family planning crucial, FT
Mukesh Ambani: time to deliver? beyondbrics