Anil and Mukesh are at war again

The war between Reliance duo Anil and Mukesh Ambani has again erupted over a deal of Anil Ambani led Reliance Communications and South African telecom giant MTN. Mukesh Ambani, the owner of Reliance Industries Ltd. expressed his strong objection to the controlling of stakes claiming his first right of refusal to buy the part in Reliance Communications Ltd.

The siblings and sons of late Dhirubhai Ambani, the No1 entrepreneur of his time and the founder of Reliance group of companies, are at war again after the split of the group. Reportedly, the Chairman and largest shareholder of Anil Dhirubahi Ambani Group (ADAG) has begun a negotiation to MTN group to sale a large portion of his stake of Reliance Communication to MTN.

However, Mukesh Ambani on Thursday taking a tough stand sent a letter to MTN claiming that he has the first right to reject any stake deal on the basis of agreement held in 2006 between the two brothers while splitting the Reliance Group. A similar copy has also been sent to ADAG office, as per sources revealed.

According to RIL officials, ‘As per signed agreement between both ‘Ambanies’, RComm cannot sale the major portion of shares to anyone before getting permission from RIL as Mukesh Ambani had built it from the base and had successfully nourished it before handing it over to his younger brother during the family settlement. So, he should be given the first right to buy RCom to RIL, since most of RCom shareholders are originally RIL shareholders. Thus, it was RIL’s duty to ‘protect’ them from a sale which would only be profitable for Anil Ambani.’

ADAG in this response released a press statement, “RIL’s claim is legally and factually untenable, baseless, and misconceived. RIL has based its claim on an agreement of January 12, 2006, which was unilaterally signed only by RIL’s officials, when RComm 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’.”

“RIL is seeking to disrupt the creation of one of the world’s most valuable telecom combinations, which will make over a billion Indians proud. RIL’s actions are clearly anti-consumer, anti-investor and anti-globalisation, and against the vision, beliefs and principles of the founder of the group, late Dhirubhai Ambani,” alleged ADAG in the release.

Earlier, Reliance Communication was seeking to negotiate with MTN regarding to sell Anil’s around two-third of his 66% stake in RComm to MTN and to be a major shareholder in African telecom firm, if the deal fructified.

According to sources, if this deal becomes productive, the merger company would be the fifth largest telecom company in the world and Anil Ambani would become the major shareholder of the joint company by holding one-third stake and is likely to become the Chairperson of the company. The joint company would have cumulative 115 million customers in 23 countries in Asia, South Africa and Middle East, after merging successfully.