The Anil Dhirubhai Ambani Group (ADAG) on Friday alleged that Mukesh Ambani’s Reliance Industries Ltd (RIL) was trying to “disrupt” the ongoing merger talks between Reliance Communications Ltd (RCOM) and South African telecom major MTN.
The charge signalled a fresh spat between the Ambani brothers who split the family business between themselves in 2005. RCOM, founded and nurtured by Mukesh, went to Anil as a part of the settlement.
Sources said RIL company secretary K. Sethuraman wrote to MTN on June 12, saying RIL had a “first right of refusal” on the shares of RCOM. The deal structure planned between MTN and RCOM suggests that while the promoter’s holding in RCOM will be transferred to MTN, the promoters of MTN will transfer their holding to Anil Ambani.
RIL’s spokesperson said: “RIL has in good faith notified both Anil Dhirubhai Ambani Group and MTN Group of stipulations contained in an agreement, the validity of which has never been questioned so far by ADAG.”
A release from ADAG late on Friday said RIL had claimed the right to buy the shares of RCOM promoters in case they wanted to sell. RIL was making this claim on the basis of an agreement between Reliance Communication Ventures Ltd and RIL signed on January 12, 2006, it added.
Reliance Communication Ventures was one of the vehicles used to demerge the shareholding in telecom business of RIL.
The ADAG release alleged that the agreement was signed when RCOM was still controlled by RIL, and the
control was not passed on to Anil’s side.According to the release, “RIL has based its claim on an agreement of January 12, 2006, which was unilaterally signed only by RIL’s officials, when RCOM was under RIL’s control, under a procedure which the Hon’ble Bombay High Court, vide its judgement dated 15th October 2006, has held to be ‘unfair and unjust’.”
The release further stated that RIL’s claim is “legally and factually untenable, baseless, and misconceived.”
Meanwhile, a Reuters report from Johannesburg quoted the MTN Group as saying it continued to be in talks with RCOM.
“As far as we are concerned nothing has changed. We are continuing talks as per our cautionary announcement published last month,” MTN spokeswoman Nozipho January-Bardill told the news agency.