SC questions RIL on Ambani MoU
The Supreme Court on Wednesday questioned Mukesh Ambani-led Reliance Industries Ltd’s (RIL) decision to delink itself from the Memorandum of Understanding (MoU) signed between the two brothers, reports HT Correspondent.business Updated: Oct 28, 2009 20:56 IST
The Supreme Court on Wednesday questioned Mukesh Ambani-led Reliance Industries Ltd’s (RIL) decision to delink itself from the Memorandum of Understanding (MoU) signed between the two brothers.
“There was a common joint asset,” the bench headed by Chief Justice of India said. “When the division took place, you kept the production and decided not to part with it. However, you went in for an MoU and gave part of the produce to the de-merged company at a lower cost for profit. Now, how can you de-link from the MoU?”
The query came as RIL’s counsel, Harish Salve, claimed the arrangement to divide gas between RIL and RNRL was not an obligation but an option. He read out the MoU and said RIL was obliged to supply 12 million metric standard cubic metres per day (mmscmd) of gas to NTPC and 28 mmscmd to Anil’s Reliance Energy Ltd.
The remaining gas was to be divided between RIL and RNRL. “Even in this sharing, RIL is to get first preference under which it would get 24 mmscmd gas for its captive conversion,” Salve said.
He said it wasn’t the MoU but the de-merger scheme that was binding. It was the scheme that specified gas would be sold to RNRL and NTPC at the same cost, but subject to government approval. Salve agreed RIL was bound to sell gas at $2.34 if RNRL succeeded against the government. At this, the court asked Salve, “Why is he fighting it out with you? Let RNRL fight it out with the government.”