Mukesh, Murli and Anil
October 31st, 2009|
How many times have you heard, including in the various courts the case has been in, the view expressed that the Ambani brothers should go in for mediation, preferably with their mother involved – tumhare paas maa hai, uske paas jaao na! Sounds pretty funny doesn’t it, after all it’s precisely because the brothers couldn’t resolve their disputes, with or without maa that they’re in the courts for so many years. But more than that, even in the extremely unlikely event of the two brothers wanting to conciliate, they cannot and that’s where Petroleum Minister Murli Deora comes in. It’s best to break up the case into two parts to figure this out. Basically, as part of the family settlement that’s now supposed to have been signed by Mukesh Ambani as Mukesh Ambani and not as Reliance Industries’ chief, the two brothers agreed on the supply of gas from the KG Basin to Anil Ambani’s power plants. This mentioned the amount of gas (28 mmscmd) and the fact that the terms would be similar to the ones RIL had signed with NTPC – that is, for 17 years and at a price of $2.34. So far, all clear? In late 2005/early 2006, when Reliance Natural Resources Limited was still controlled by RIL, a board meeting was called and a board resolution passed on the agreement – since this, according to the Anil Ambani group, put lots of caveats on the gas supply, its director on the company (JP Chalasani) objected but was overruled since the other two directors were Mukesh Ambani loyalists. A few days later, RIL executives signed the agreement with RNRL – except they signed it on both sides, that is they also signed on RNRL’s behalf. This is what Anil Ambani went to court on – that the contract did not reflect the spirit of the MoU and this is why the MoU keeps coming into the picture. This is why the courts keep asking how, if Reliance Industries is challenging the MoU, the Reliance empire got carved up … but that’s another story. Working out a settlement to ensure the contract reflects the true spirit of the MoU presumably is something that has a chance, even if similar to that of a snowball in hell, of getting settled between the two brothers. Here’s where Murli Deora comes in. Apart from the issue of the MoU and the contract, there is now the issue of whether RIL even has the right to sell the gas it gets from the KG Basin. At the time RIL signed the Production Sharing Contract (PSC) for the KG Basin gas with the government, at the time it signed the contract with NTPC and RNRL, the PSC was quite clear that RIL had all the freedom to enter into such contracts. But when the fight between the brothers escalated, the ministry said RIL could not sell the gas without its permission. The government then repeated this in various affidavits in various courts – though the Group of Ministers’ minutes clearly said their decisions did not apply to existing RIL contracts with NTPC and RNRL, the government is firm that it alone controls who will get the gas and at what price. So even if the Ambanis decide to bury the hatchet, how does one take care of the government’s view that RIL has no rights to sell gas without its prior permission? Or is everyone assuming that once the brothers settle, the government will automatically reverse its stand? Tells you just how low the government has fallen in everyone’s esteem. |






