Anil group questions RIL pacts

The bitter fracas between the Ambani brothers refuses to die down. This time the Anil D Ambani Group ADAG has raised its voice against the...

The bitter fracas between the Ambani brothers refuses to die down. This time the Anil D Ambani Group ADAG has raised its voice against the gas supply, non-compete and brand agreements signed between Mukesh Ambani controlled Reliance Industries and the four ADAG companies.

Saying that these agreements were signed while the companies were still under the RIL8217;s control, ADAG-controlled boards said that they contain material deviations from the agreed position, as per the settlement on June 18, last year.

When contacted, RIL officials refused to speak on the issue saying they have not received any communication from ADAG on these three agreements.

For instance, the board of Reliance Natural Resources, sources said, noted yesterday that the previously agreed position is that Reliance-ADAG will have the first option to get 40 per cent quantity of gas from the entire future reserves of RIL, including new discoveries of gas from new explorations, and/or bids as may be submitted from time to time.

8220;As per the agreement which was signed when the company was still under RIL8217;s control, the above option has been unilaterally restricted to RIL8217;s blocks acquired only up to June 18, 2005, and all future acquisitions of blocks by RIL have been excluded,8217;8217; sources in the Anil camp said.

This exclusion is a clear deviation from the previously-agreed position on 18th June 2005, and is only one of several such material variations in the gas supply agreement, they added.

Similarly, with regard to the non-compete agreement, the boards noted that the previously-agreed position was that the business relating to airports and airports infrastructure is exclusively reserved for Reliance-ADAG, without any exceptions.

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8216;8216;However, as per the agreement entered with RIL, which was signed while the companies were still under RIL8217;s control, RIL can enter the business of airports and airports infrastructure8212;which is claimed to be incidental/integral or necessary for any of its businesses, or, where ADAG has not been successful in privatisation of airports,8217;8217; sources said.

Just last week, Anil8217;s Reliance Airport failed to get selected for the privatisation of New Delhi and Mumbai airports. Anil has filed a petition in the Delhi High Court saying that the selection process by the government of India was faulty.

8220;These exclusions on non-compete are again amongst the significant deviations from the previously agreed position on June 2005,8221; sources added.

While the two sides have a non-compete clause for 10 years for existing businesses which can be entered into by both the sides, in the case of free businesses, the group that first commences the business would be entitled to use the trademark.

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The boards have decided to discuss and finalise appropriate amendments in all agreements with RIL, to bring the same in line with the previously agreed position on all issues.

8220;Reliance-ADAG will write to RIL for amendments to the gas supply, non-compete and brand agreements. These agreements were signed when the new ADAG companies were under the RIL control,8221; ADAG sources said.