The corporate feud between India’s billionaire Ambani brothers has flared up after arbitration proceedings were started against Reliance Communications, a move that could thwart the company’s merger with South African telecom firm MTN, news reports said on Friday.
Mukesh Ambani-owned Reliance Industries on Thursday started proceedings against younger brother Anil’s Reliance Communications (RCom), stating that the company had refused to participate in meetings to resolve a dispute concerning ownership of shares, the Hindustan Times reported.
Mukesh threatened legal action weeks ago, saying he had the first right to buy a stake in Anil’s firm that slowed down RCom’s negotiations with MTN.
Reliance Industries nominated BP Jeevan Reddy, a former judge of the Supreme Court, as an arbitrator to resolve the disputes with RCom, the report said.
”RCom has refused to participate in the conciliation meetings under the alternate dispute resolution provisions contained in the non-competition agreement,” an Reliance Industries spokesperson was quoted as saying by the newspaper.
An RCom spokesperson dismissed the Reliance Industries move, saying arbitration could happen only when ”both” parties refer the dispute to a person outside the court.
”There is no scope for arbitration as there is no dispute or occasion for any conciliation process,” he said.
”It is just a mala fide design to derail the MTN discussions. RIL’s notice for arbitration proceedings is legally and factually unwarranted,” he added.
MTN, South Africa’s largest cellphone network operator and RCom, the second largest Indian telecom company, started talks on May 26 that could create a $70-billion global wireless group operating in about two dozen countries.
The exclusivity period for discussions between the companies is due to end on Monday. According to reports in the local media, Anil wants to swap most of his 66% in RCom for a 51% stake in MTN.
Mukesh and Anil are the world richest brothers, with an estimated wealth of $85-billion between them, according to Forbes.
Mukesh, ranked the fifth richest man in the world with a net worth of $43-billion, is closely followed by his estranged brother whose fortune is estimated at $42-billion.
Sons of renowned industrialist Dhirubhai Ambani, Mukesh and Anil have hardly spoken to each other since their father’s death in 2002. In 2005, their mother brokered a peace settlement by dividing the family conglomerate. – Sapa-DPA