RIL can claim damages: Official

Amid a fresh controversy between Ambani brothers over Anil Ambani’s MTN deal, it is learnt that the Reliance Industries’ letter to MTN contains daunting legalese and states that if the deal does go through between Anil Ambani and MTN, then RIL can claim damages from both parties. This is a logical legal conclusion of the family settlement, said the RIL official on condition of anonymity. The official claimed ‘‘there is a family settlement in existence and whether it is legally tenable or not is still sub-judice.’’ The right of first refusal applies equally to both RIL and the ADAG group, he said. MTN, for its part, said it was still in talks with RCOM. ‘‘As far as we are concerned, nothing has changed. We are continuing talks as per our cautionary announcement published last month,’’ an MTN spokesperson told Reuters in Johannersburg. RCOM had informed stock exchanges on May 26 that it had entered into exclusive negotiations with the MTN Group for a period of 45 days, ‘‘for a potential combination of their businesses’’. The MTN deal has been beset with problems from the very start. MTN first engaged in a month-long discussion with the Bharti group. Bharti was reportedly willing to pay $50 billion to $60 billion for the company but talks broke off when MTN insisted that Bharti become its subsidiary. It seems that Temasek — a major investor in Bharti through Singtel — was uncomfortable with the management structure, based on the effect of the proposed structure on minority shareholder rights. Now it appears Mukesh Ambani is set to press his claim for the right of first refusal. Given that the two brothers have been involved in serious battles in the past it is not unimaginable that this fight could get dirty. The two brothers own some of the biggest companies in India whose fortunes impact India’s stock markets more significantly than any other set of companies. RCOM serves 48 million subscribers in 22 telecom circles, MTN serves over 68 million subscribers across 21 countries, and the combined entity would have become one of the world’s largest telecom companies serving nearly 116 million customers. Merged entity could also be a major powerhouse for the coming 3G auctions. By Ms.Bobby Aanand, Metropolitan Jury.

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