As the Ambanis meet in Mumbai over the next couple of days to resolve differences over ownership, one option the two brothers, may explore is keeping the flagship Reliance Industries intact and splitting between themselves the other group companies, including Reliance Infocomm, Reliance Energy, Reliance Capital and Indian Petrochemical Corporation Ltd.

Lawyers Business Standard spoke to believe if Reliance Industries is to be kept intact, one brother will have to buy the other out. A Reliance spokesman declined to comment on the matter.

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Ahmed Hirani, partner of Mazumdar & Co, a Mumbai-based law firm, said the idea of splitting Reliance Industries in two did not make sense. "The brothers should keep the country's largest private company intact and divide the rest of the group between themselves."

Citing examples of splits in premier business families, a lawyer at another leading Mumbai-based law firm said: "None of the families divided the main company among the warring factions. They kept the main company intact and divided the rest among the factions."

The Birlas, the Goenkas and the Thapars all did this, he said and added that the Bajajs were also trying to divide assets using this thumb rule.

Other lawyers said it would be better to appoint an arbitrator acceptable to both brothers than moving court, in which case the issue could take years to resolve.

H P Ranina, tax expert and Supreme Court advocate, said, "Since there is no breach of trust (between the brothers), legal recourse may not be the only option. It could be solved through an arbitrator."

"The brothers need to work out an arrangement and then proceed to get shareholder approval in each case, because all the major group companies are listed and Reliance Industries holds the majority stake in each of them," another Mumbai-based corporate lawyer said.

Mukesh Ambani is chairman and managing director of Reliance Industries and is also chairman of Reliance Infocomm. Anil Ambani is vice-chairman and managing director of Reliance Industries and chairman and managing director of Reliance Energy, on whose board Mukesh Ambani does not sit.

In IPCL, Mukesh Ambani is the chairman and Anil Ambani the vice-chairman.

If the rift called for a partition of the family-controlled equity in Reliance Industries, the brother who intended to buy out the other might have to pay a premium to the market price, Hirani added. The Reliance Industries scrip closed at Rs 527.15 on Friday.

According to publicly available data, 7.5 per cent of Reliance Industries' equity is owned by a family-controlled trust, the Petroleum Trust.

The largest chunk of the family holdings is, however, controlled by family-owned investment companies.

At least 14 such companies hold more than 1 per cent each in Reliance Industries, accounting for a combined shareholding of 34.04 per cent.

Together with the 5.13 per cent directly held by family members and the Petroleum Trust's 7.5 per cent, the total comes to 46.67 per cent, which is controlled by the family, according to data on the Bombay Stock Exchange website.

Reliance Industries has a market capitalisation of Rs 73,610 crore (Rs 736.10 billion). The value of the 46.67 per cent stake is Rs 34,353.78 crore (Rs 343.537 billion).

The big question, of course, is whether the family's holding in Reliance Industries falls under Hindu Undivided Family (HUF) law. If it does, it has to be divided equally among the sons and the mother; Dhirubhai Ambani's two married daughters are excluded.

But matters get complicated here. How the family shares will have to be divided depends on which HUF system is followed.

Rajiv Luthra, managing partner of Luthra & Luthra, the New Delhi-based law firm, points out there is more than one type of HUF. The mitakshara HUF excludes daughters, the dayabhaga does not.

There is also the issue of whether the Ambani family stake includes just Mukesh Ambani, Anil Ambani, and their mother or whether the Meswanis, too, are involved. If they are, any division of the family stake will not be three way.

Leaving aside this complication, a three-way division of the 46.67 per cent stake will be worth Rs 11,451.26 crore (Rs 114.512 billion) for each of the three individuals.

So the brother who opts out of Reliance Industries will receive at least Rs 11,451.26 crore, excluding any premium, in return for relinquishing all claims. Where will the other brother get that kind of cash? He cannot just pull it out of the listed Reliance Industries.

If the family's equity in Reliance Industries does not fall under HUF law, the Hindu Succession Act will apply, and the family's equity has to be divided at least five ways -- some lawyers say that even grandchildren are entitled to shares -- with the daughters getting their shares too. In a five-way partition, the brother that buys out the other will have to fork out about Rs 6,870 crore (Rs 68.70 billion), plus a premium.

But such figures depend on several factors. If Anil Ambani takes over Reliance Industries' shares in Reliance Energy and brother Mukesh takes over Reliance Industries' shares in Reliance Infocomm, which stake is more valuable?

If Reliance Industries' stake in Reliance Infocomm is more valuable, will Mukesh have to compensate his brother to that extent?

Clearly, any settlement of this dispute will be difficult and complicated.

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Some of the questions

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<li> If Reliance Industries is to be kept intact, one brother will have to buy the other out, possibly with a premium to the market price

<li><B> In a three-way split, the brother who opts out of Reliance Industries will receive at least Rs 11,451.26 crore (Rs billion), excluding premium. Where will the other brother get that kind of cash? He cannot just pull it out of the listed Reliance Industries</B>

<li> Does the Ambanis' holding in Reliance Industries fall under Hindu Undivided Family (HUF) law. If it does, it has to be divided equally among the sons and the mother; Dhirubhai Ambani's two married daughters are excluded

<li><B> How the family shares will have to be divided depends on which HUF system is followed. The mitakshara HUF excludes daughters, the dayabhaga does not</B>

<li> If the family's equity in Reliance Industries does not fall under HUF law, the Hindu Succession Act will apply, and the family's equity has to be divided at least five ways. In a five-way partition, the brother that buys out the other will have to fork out about Rs 6,870 crore (Rs billion), plus a premium

<li><B> If Anil Ambani takes over Reliance Industries' shares in Reliance Energy and brother Mukesh takes over Reliance Industries' shares in Reliance Infocomm, which stake is more valuable? </B>

<li> If Reliance Industries' stake in Reliance Info is more valuable, will Mukesh have to compensate his brother to that extent?

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