Ambani brothers' truce welcomed

08:48, May 25, 2010      

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India's government, stock markets and analysts Monday welcomed news that the warring billionaire Ambani brothers had called a truce in their feud over their father's empire.

Shares in both Anil Ambani's Reliance Natural Resources Ltd (RNRL) and the Mukesh Ambani-led Reliance rose in morning trade, helping the benchmark 30-share Sensex index gain 1.53 percent by noon, to reach 16,696.91.

RNRL soared 23.03 percent to 54.75 rupees ($1.17), and Reliance was up 3.64 percent at 1,032 rupees ($22.10) after both stocks had taken a battering in recent weeks from the brothers' long-running court battle over gas supplies.

Indian Finance Minister Pranab Mukherjee greeted the news as a "positive development."

Indian newspapers also gave a thumbs-up, with the Economic Times declaring that "Blood is thicker than gas," in reference to the very public mudslinging between the brothers.

The two Reliance groups announced Sunday that they would scrap contentious business pacts signed in 2006, which had fueled the row. They also pledged to create "an environment of harmony" between the two groups.

The pact came after India's Supreme Court ruled two weeks ago in favor of Mukesh, the country's richest man, in his spat with Anil over a family deal to share the nation's largest gas find.

Crucial deals had been stalled by the feud, which at one point saw the Bombay High Court tell their mother to intervene.

The seeds of the Ambanis' war lay in the carve-up of the Reliance empire, built by their father, Dhirubhai Ambani, a rags-to-riches entrepreneur who died in 2002 without leaving a will.

The two brothers had not been on speaking terms after the group split in 2005.

"Sentimentally, this is good news, as uncertainty over the disputes ends," said Gaurav Dua, head of research for Mumbai-based brokerage Sharekhan.

Source: Global Times


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