A feud that split one of India’s most powerful business families two years ago resurfaced this past weekend over the potential takeover of a South African telecom company.
The Reliance Group was divided in 2006 between brothers, but the simmering tension between the two reignited after it was revealed in May that Reliance Communications Ltd., controlled by younger brother Anil Ambani, was in buyout talks with the MTN Group, South Africa’s largest mobile phone network operator.
Petrochemical giant Reliance Industries Ltd., headed by elder brother Mukesh Ambani, claimed first rights of refusal to purchase a controlling stake in Reliance Communications Ltd.
“RIL’s claim is legally and factually untenable, baseless, and misconceived,” Anil Ambani’s company said in a media release.
It was the first in a series of public releases.
“RIL has in good faith notified both Anil Dhirubhai Ambani Group and MTN Group of the stipulations contained in an agreement,” said a statement issued Friday by Reliance Industries.
Reliance Communications fired back Sunday, saying that the January 2006 agreement was illegal since it was made when the telecom firm was still under the control of Reliance Industries.
On Monday, a Reliance Communications spokesman said talks with MTN were still on, and the letter from Reliance Industries had no effect.
Reliance Industries said it was still waiting for a response from Reliance Communication and MTN.
Reliance Industries is India’s biggest private sector company, with interests in the petrochemical business, besides exploration, refining and retail sales of oil.
Reliance Communications Limited, with a net worth in excess of US$14 billion, is the flagship company of the Reliance Anil Dhirubhai Ambani Group.
The company, India’s second-largest wireless operator, and MTN confirmed in May that they had entered into exclusive negotiations that would create one of the world’s largest telecommunication companies, with operations in some 24 countries.
The fight over MTN has again pitted brother against brother, a feud that dates back to 2002, when their father, Dhirubhai Ambani, founder of the Fortune 500 Reliance Group, died and left no will.
The Reliance Group was carved up in 2006.
Mukesh Ambani gained control of the oil and petrochemical divisions, while younger brother Anil got the telecommunication, energy, financial services and entertainment arms.
Herald Tribune
