The Hindu Business Line : Reliance: The sibling rivalry continues

Delhi/Chennai, June 14 Even after the Reliance group announced the division of companies between the two brothers — Mr Mukesh Ambani and Mr Anil Ambani — in June 2005, relations continued to be strained between the two.

The latest dispute is Reliance Industries of Mr Mukesh Ambani claiming first right to his brother’s stake in Reliance Communications in the event of an equity swap with MTN of South Africa, with which Reliance Communications is involved in merger talks.

The dispute between the two brothers as far as the telecom sector is concerned dates back to 1999, when the then undivided Reliance group was deciding on its future for this sector.

Shortly after the family settlement was announced, Reliance Natural Resources Ltd belonging to Mr Anil Ambani got into a dispute with Reliance Industries controlled by his brother over RIL’s agreement for supplying gas from its Krishna-Godavari basin gas fields.

The two companies are fighting the battle in court. Reliance Natural Resources Ltd (RNRL) requires the gas for its power plants, particularly the Dadri project. RNRL is to get 28 million standard cubic metres of gas from RIL. The two companies are fighting over the price and quantity of gas to be supplied. RNRL took the issue to court in November 2006 saying RIL was not implementing the demerger scheme.

As far as the telecom sector is concerned, the Reliance group was operating GSM-based mobile services in the North East region, Bihar and Orissa and when it was working on its plan for a nationwide footprint, Mr Mukesh Ambani picked the CDMA technology, a competing wireless technology, overruling objections from his younger brother.

After the group demerger, when telecommunications came under his control, Mr Anil Ambani decided to shift back to GSM technology for which he approached the Government, seeking permission to offer dual technology (both CDMA and GSM).

The two brothers have been bidding against each other for projects too — Reliance Energy Ltd controlled by Mr Anil Ambani was the successful bidder for the Mumbai trans-harbour link, outbidding a company floated by his brother, while Reliance Industries bagged a 7.5-hectare plot in Mumbai’s Bandra-Kurla complex in which the bidders included the Anil Ambani-controlled Reliance Communications and Infrastructure Ltd.

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