In a major setback, the much-awaited ostentatious deal, which could have become the biggest ever deal (bigger than Tata-Corus deal) in Indian accusation history, if it proved fruitful, ended mutually in the mid way on Friday. Both Anil Ambani led Reliance Communication (RCom) and South African Telecom firm MTN group officially announced it on Friday evening, blaming legal issues behind this breakage.
In an officially release, MTN and RCom said, “Owing to certain legal and regulatory issues, the parties are presently unable to conclude a transaction. Accordingly, it has been mutually decided to allow the Exclusivity Agreement to lapse.”
But, the other sources are probing towards ‘more’ than legal and regulatory issues as Mukesh Ambani, the chairman of Reliance Industries Ltd (RIL) and the estranged sibling of Anil Ambani, has been opposing the deal and initiated arbitration proceedings against RCom.
Mukesh Ambani had argued that RIL had the first right of refusal to RCom as the major shareholder of RCom.
It is known that earlier Reliance Communication was owned by Mukesh Ambani with the name of Reliance Infocom and after the settlement of family dispute, its authority went to Anil Ambani, leaving the as much share in the hands of Mukesh Ambani.
Thereby, the 45-days long negotiation, which was approaching to a deadline of July 21, 2008, ended with a mutual understanding to walk out without any result.
According to some industry sources, the Bharati Telecom may open its talk again with MTN as both companies were pretty close to a merger deal in May, which was not materialised due to some issue in theie corporate structure. However, it is also likely that other global telecom companies may put up their hands in a deal with MTN.
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