India’s Ambani brothers ‘battle’ over Reliance strategy
A major battle is looming involving the Reliance conglomerate in India that could have far-reaching implications for the telecom sector in parts of Asia, Africa and the Middle East.
India’s billionaire Ambani brothers have been in dispute over a huge deal being negotiated by the younger brother Anil Ambani to create an emerging-market telecoms giant.
The ongoing feud between the brothers flared up earlier this month when older brother Mukesh Ambani, head of Reliance Industries, India’s largest private company, told the South African telecom player MTN that he had first right of refusal to buy a controlling stake in Anil’s Reliance Communications, according to media reports.
Reliance Communications had entered exclusive discussions in May to combine with MTN to build a telecoms operation that would reach from Asia to Africa to the Middle East with a market capitalization of up to US$70 billion. MTN, Africa’s largest mobile operator, said it intended to proceed with the talks.
But legal experts were reported to believe that the dispute, which hangs on the original settlement involving the break-up of the Reliance empire after the 2002 death of the father Dhirubhai Ambani, could seriously complicate proceedings.
Previously, Anil had threatened legal action against his brother if he tried to block the deal, a Reliance Communications source said.
Reliance Industries insisted a 2006 agreement stipulated that a decision on a majority stake sale in any of the companies belonging to the original group could only be made after consultations with the parties involved in the settlement.
The brothers appeared to work well together when their father was alive but relations started souring after they inherited the huge business empire from Dhirubhai in 2002.
Also see web reports:
- India - Mobile Communications - Market Overview;
- India - Mobile Communications - Major Operators;
- India - Mobile Communications - Technologies including 3G;
- India - Telecommunications Regulatory Overview.
Peter Evans - Senior Research Analyst - BuddeComm
