It was a strategic Sunday for warring billionaire brothers Mukesh (53) and Anil Ambani (50) as they took the first step towards reconciling their differences over the five-year-long gas dispute.
<b1>Known to avoid each other despite living in the same premises in Mumbai, the brothers signed a new pact cancelling the January 2006 non-compete agreement. That agreement, signed after the split of the undivided Reliance group, prevented them from entering into each other’s businesses.
In Sunday’s pact, approved by the respective boards, even the words were the same.
“The cancellation of the existing non-compete agreement will provide enhanced operational and financial flexibility to both groups, and greater ability to participate in high growth sectors such as oil and gas, petrochemicals, telecom, power, financial services,” Mukesh’s Reliance Industries Ltd and Anil’s ADA Group said in separate statements.
The sole exception in the new pact: Mukesh will not enter gas-based power generation up to March 31, 2022. He can, however, set up gas-based power plants for captive consumption.
The statements also said the cancellation of the agreement “will eliminate any room for further disputes on matters relating to scope and interpretation of the non-compete obligations”.
The 2006 pact was to come up for renewal in January 2011.
The new pact is a precursor to a bigger settlement over gas supplies by Mukesh to Anil. The Supreme Court, in a May 7 judgment, had told the brothers to renegotiate the terms of gas supply within six weeks. “RIL and RNRL will expeditiously negotiate gas supply arrangement,” the statements said.