RIL thrashes family MoU; SC quizzes on demerger | business | Hindustan Times
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RIL thrashes family MoU; SC quizzes on demerger

business Updated: Oct 22, 2009 20:36 IST

Reliance Industries today said it had no knowledge of the Memorandum of Understanding between its Chairman Mukesh Ambani and younger brother Anil, but the Supreme Court sought to know how could there be a division between them in case there was no MoU.

"If there was no MoU or any arrangement, then there was no division (of Reliance empire between Ambani brothers). Why was the need of demerger of a well known oil company (RIL)," the three-judge bench headed by Chief Justice K G Balakrishnan asked RIL counsel Harish Salve.

On the third straight day of hearing on the gas supply dispute between group firms of two brothers, Justice R V Raveendran asked RIL to satisfy the bench that the MoU, signed in 2005, was not between two companies, but two individuals.

Salve said that RIL board had no knowledge of the MoU, which was also not produced before the shareholders, adding that it will be "a dangerous trend if promoters are allowed to have side-deals...

"Secret agreement between promoters which affect company's shareholders is not binding on the company, especially that has three million shareholders."

The bench also enquired if the MoU, which has not been made public till date, could be produced before the court.

"We want to see the entire document of MoU," the bench said, to which RIL counsel Harish Salve said that his client had no problem in producing it. RNRL counsel Ram Jethmalani, however, said that he thought RIL had a problem with it.