Ambani family pact “threatens state ownership of natural resources”
The ongoing dispute between India's Ambani brothers is set to continue after a Bombay High Court ruling was thrown into doubt by the government last week.
The ruling, taken last month, upheld a private family agreement made in 2005 that stated younger brother Anil should receive below-market-price gas from his brother Mukesh's company Reliance Industries.
However, the government has questioned the right of the brothers to set gas prices amongst themselves and so filed an affidavit with the Indian Supreme Court. In its petition the government argues that the family pact threatens to undermine state ownership of natural resources. The affidavit stops the enforcement of the Bombay Court decision until Supreme Court proceedings, expected to begin on 1 September, have come to a conclusion.
Since the Bombay Court decision Mukesh has reportedly resisted supplying cheap gas to Anil's Reliance Natural Resources. In a strongly worded letter to India's prime minister Manmohan Singh, Anil Ambani condemned his brother's actions and accused him of putting greed before national interest. "Blinded by its arrogance, Reliance Industries has not heeded any council, and has blatantly disregarded every court directive in its headlong pursuit of corporate greed – at a cost of hundreds of millions of customers across the country, from whom it wishes to extract an exorbitant price for gas," said one extract from the letter.
Reliance Industries said the allegations in the letter were unfounded and the decision over the enforcement of the family agreement now lies with the Supreme Court.
The disputes between the brothers began after their father's death in 2002 when they had to divide his business empire between them. Now each heads their own conglomerate, Mukesh, 51, has Reliance Industries and Anil, 49, owns Reliance Anil Dhirubhai Ambani Group. The current gas row stems from an agreement made in 2005 during peace talks between the brothers brokered by their mother. It stated that Reliance Industries was obliged to sell cut-price gas to Reliance ADA for 17 years.
The Ambani brothers are two of the most successful businessmen India has produced but they attract more attention for their constant feuding than their business prowess. Mukesh is worth approximately $19.5 billion while Anil's estimated worth is $10.1 billion.
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