Ambani brothers war may intensify
Ambani brothers war intensified on Saturday with the younger Anil’s group warning to retaliate in case Mukesh-led Reliance Industries goes legal with its claim on the potential multi-billion dollar amalgamation deal that the former is pursuing with South African telecom giant MTN.
In a strongly worded reply to RIL’s threat to go legal against ADAG to enforce its right of first refusal, Anil-led Reliance Communications said, “If RIL chooses to take any legal action the same will be vigorously defended by RCom and RCom would claim cost and damages from RIL.”
The battle between the two richest Indians had flared up after RIL wrote to MTN and ADAG, copies of which were sent to the bankers, cautioning that the amalgamation deal through reverse swap would tantamount to breach of RIL’s first right of refusal to acquire a controlling stake in RCom.
The deal is estimated to create a combined entity worth a size of about $70 billion and could have operating profits higher than RIL, India’s biggest private sector firm.
Following up its strong criticism of RIL’s communication, ADA Group Company wrote a letter to RIL, saying, “There is no question of taking note of any alleged rights on RIL’s part.RIL’s claim is legally and factually untenable, baseless and misconceived, to be dismissed with contempt it deserves.”
Though its spokesperson said that there was no change in RCom’s stand from what was stated earlier, the company sources said, “The use of threatening and coercive language by RIL, India’s largest private company, with MTN, a globally respected telecom major, is very unfortunate.”
They said “RIL’s action in sending copies of the letter to a large number of banks and intermediaries without even first communicating with RCOM reflects its ulterior and malafide motives.”
Terming RIL’s threats as “false bogey of litigation and damages,” the RCom sources expressed surprise that without knowing of the nature of a possible transaction between RCom and MTN, how RIL has jumped to the conclusion that it would be covered by the alleged agreement of January 12, 2006.
In its letter to MTN, RIL had said that as per the said agreement it has “a right of first refusal in respect of tranfer of shares of Reliance Communications Limited by the Reliance Anil Dhirubhai Ambani Group.”