Mukesh`s first refusal right claim meaningless: Anil

Reliance Communications Chairman Anil Ambani today said he could transfer shares in the company without restrictions, rejecting Reliance Industries Chairman and elder brother Mukesh Ambani's claim of having the first right of refusal as "meaningless''. Citing an Article under the Companies Act, RCom has stated that "any restrictions on the free transfer of shares in an Indian public limited company, even if present in its Articles of Association, are illegal and unenforceable". RCom was stating Section 111A of the Companies Act, 1956. On this basis, the ADAG group claims RIL's claim is meaningless. The company also stated that the Union Cabinet ministers, based on an opinion by the Attorney General of India and various Supreme Court decisions, also took this view. "RIL's claim of a right of first refusal is simply an excuse to try and disrupt the creation of one of the world's most valuable telecom combinations, with a unique footprint covering the emerging growth markets of India, Africa and the Middle East," it said. ADAG also states that RIL's position is even worse as its alleged right of first refusal is not even incorporated in RCom's Articles of Association. An RIL spokesperson, however, declined to make any comment on the issue. RCom also said RIL's reference to an agreement dated January 12, 2006, was misleading, as RCom had written to RIL the same day, rejecting the procedure adopted for finalising such agreements as being illegal. ADAG had contended that the agreement was not acceptable as L V Merchant, on behalf of RIL, and Sandeep Tandon, on behalf of RCom, signed it even though he was a part of the Mukesh Ambani group. However, sources close to RIL said: "It is surprising that even after receiving a legal written letter from RIL, both RCom and MTN have not replied, stating their legal position." ADAG retorted saying: "RIL is evading the issue that the alleged agreement dated January 12, 2006, was illegally signed only by RIL's own officials, when RCom was still under Mukesh Ambani's control. On that date, the management control of the company had still not been transferred to ADAG. The Bombay High Court has upheld this stand by a judgment delivered on October 15, 2007. ADAG also said they had written letters again on February 6 (when the management of RCom was eventually transferred to ADAG) as well as on February 27, clearly stating that they did not agree to the procedure involved in the agreement. However, RIL did not respond to these letters. Sources in ADAG also pointed out that on January 10, just two days before the agreement was signed, ADAG executives had written a letter to RIL, requesting them to send them the draft of the agreement, which was to be discussed. However, again, it got no response from the Mukesh Ambani group. By Ms.Bobby Aanand, Metropolitan Jury.

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