The dispute between the Anil Ambani controlled Reliance Natural Resources and Mukesh Ambani controlled Reliance Industries comes up for hearing at the Bombay High Court again on July 22nd, 2008. The senior Ambani's side hopes to get the court stay order granted on any third party sales of the gas vacated today while RNRL is likely to contest the same.
Mukesh who has no love lost for younger brother Anil is hardly keen to supply gas on a firm basis to his younger sibling so that the latter can set up a network of power plants across the country and get into the city gas distribution business in Mumbai and Delhi. In a gas starved country where fertiliser plants and power plants alike are running short of capacity for want of fuel, Mukesh knows he is in a sellers market. The dispute over what price should the gas be supplied by RIL to ADAG is only symptomatic of the animosity between the brethren.
To be fair to the senior Ambani he seems legally in the right. Page 10 of the Draft Information Memorandum filed by RNRL with the stock exchanges for listing of its shares has the following amongst its Risk Factors:
"RIL will supply gas under the Gas Master Supply Agreement and any Gas sale and Purchase agreement only on the receipt and continued effectiveness of all approvals from all Governmental and other authorities including those required for gas sales price under the applicable GSPA as the gas sales price to be used for cost recovery, profit sharing, and all other purposes under the applicable Upstream arrangements.
It cannot be said with certainty that all approvals will be received, or received in a timely manner as expected or continue to remain in effect if received."
Given the above its seems that Anil Ambani is on a really shaky ground because RIL has kept enough exit clauses for itself to squeak out of any moral obligation it owes, to the shareholders of RNRL which are in effect shareholders of RIL who got shares of the demerged entity.
Anyone care about the minority shareholders here?