Sunday, June 19 2005 13:18 Hrs (IST) - World Time -

New Delhi: Post settlement of ownership issues between Reliance group Chairman Mukesh Ambani and his younger brother Anil, flagship company Reliance Industries today (Jun 19, 2005) said that its demerger would be executed within three months to a year with up-most importance to protect investors.

"It (demerger) is feasible. We have done a lot of thinking on this. We are now planning it as per legal requirements," Y P Trivedi, a RIL Director heading Board committee authorised to recommend a 'suitable scheme of reorganisation, told sources in New Delhi in an interview.

A day after the announcement of the settlement, under which Mukesh would retain RIL and IPCL along with some other group companies while Anil would get charge of Reliance Infocomm, Reliance Energy and Reliance Capital, Trivedi said demerger of the flagship company to effect the deal could take as much as 10-12 months.

"We will try to complete the process early," he said and added that it may take at least 3-4 months.

While effecting the change, the underlying principle would be to protect the interest of over three million shareholders, he said. "Shareholders interest and share value will not be eroded when the process (of demerger) is done," Trivedi asserted.

Stating that the process was time consuming and complex, Trivedi said, "There are so many things to be done for it. There are legal problems, then there will have to be meetings as per Court requirements, etc."

RIL Board, headed by Mukesh, had decided yesterday to "reorganize the business as per Kokila Ambani's (widow of group's founder Chairman Dhirubhai Ambani) principle of ensuring the highest shareholders value."

Taking on record her efforts in "settling the differences amongest the family members and promoter directors", RIL Board authorised the Corporate Governance and Stakeholders Interface Committee, headed by Trivedi, to examine in depth all the relevant issues including statutory and legal requirements and suggest a suitable scheme of reorganisation.

Asked as to how an RIL shareholder could have his interests protected in another entity to be created from the flagship company for Anil Ambani, he said, "This can be taken care of by concept of demerger. It requires legal planning."

On whether Anil Ambani had talked to him after the settlement and RIL Board meeting and if he was happy about the deal, Trivedi said, "We talked on phone and exchanged pleasentaries."

On the issue of top level changes including the restructuring at Board levels consequent to settlement, he said that even he was a director at the Board of Reliance Infocomm and he would quit.

"Everything will be done in due course of time while keeping the legal requirement in view."

The reorganisation of the Rs 1,00,000 crore Reliance Group will involve transfer of shares from Mukesh and Anil in RIL, IPCL, REL, Reliance Capital and Reliance Infocomm.

The board committee will now work out the modalities of the share transfer and share swaps.

According to analysts, the shareholders of RIL may be given an option to have stakes in other sister concerns of Reliance at a proportion that would be decided after detailed valuation and deliberation.

Trivedi did not like to elaborate as the newly constituted Board Committee was yet to deliberate on this.

The transfer of shares from Reliance Infocomm may require that the company be listed at bourses so that the intrinsic value of the shares could be ascertained.

While confirming this, Trivedi declined to give any time frame of Reliance Infocomm's listing in the capital market.

At present, four of the five main companies of Reliance groups are listed. These are RIL, IPCL, Reliance Energy and Reliance Capital.

After seven months of intense and often acrimonious battle for the ownership, the two Ambani brothers yesterday reached an "amicable" settlement under which India's largest business group will be divided.