The Reliance Group Saga - Break-up of the Largest Family-owned Business in India


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:

Case Code : BSTR182 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

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Case Length : 19 Pages
Period : 2002-2005
Organization : Reliance
Pub Date : 2005
Teaching Note : Not Available
Countries : India
Industry : Diversified

Abstract:

The case discusses the dispute between Mukesh Ambani (Mukesh) and Anil Ambani (Anil) relating to control and 'ownership' issues of Rs. 1000 billion Reliance Group of companies, the largest family-owned business in India. The seven-month-old dispute was settled on June 18, 2005, with Mukesh getting control over Reliance Industries (RIL) and IPCL while Anil got control over Reliance Infocomm, Reliance Energy and Reliance Capital. The case describes the rapid growth of Reliance group under the leadership of Dhirubhai Ambani, the founder of the group. It illustrates the factors that lead to the division of family-owned businesses. The case also highlights the implications of the division, the opportunities and challenges for the two brothers in the near future.

Issues:

» Study the importance of succession planning.
» Analyze the reasons that lead to splits in family-owned businesses.
» Examine the effects of family feuds on shareholders value.
» Recognize the importance of sound corporate governance practices and transparency in business.
» Examine the implications of division in family-owned businesses.

Contents:

  Page No.
The Settlement 1
Background Note 2
The 'Ownership' Issue 4
Allegations and Counter Allegations 6
The Division of Reliance Group Businesses 8
The Consequences 11
Exhibits 13

Keywords:

Reliance Group, Succession Planning, Family-owned Business, Family Disputes, Business Splits, Ownership Issue, Hindu Succession Act, Reliance Industries, Reliance Infocomm, Shareholding Patterns, Shareholder Value, Reliance Group and Succession Planning.

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