India's billionaire Ambani brothers are battling again - this time over a blockbuster deal being negotiated by the younger sibling Anil to create an emerging-market telecoms behemoth.
The long-simmering feud flared anew last week when older brother Mukesh Ambani, head of Reliance Industries Ltd, India's biggest private firm, told South African telecom giant MTN he had first right of refusal to buy a controlling stake in Anil's Reliance Communications.
Reliance Communications entered exclusive talks in late May to combine with MTN to build a telecoms giant that would reach from Asia to Africa to the Middle East with a market capitalisation of up to 70 billion dollars.
MTN, Africa's largest mobile operator, says it is still going ahead with the talks. "Nothing has changed. We are still having talks," MTN spokeswoman Nozipho January-Bardill said.
"Talks are on track - in fact they are progressing well," said a Reliance Communications official. ut legal experts say the row, which hinges on a settlement deal involving the carve-up of the Reliance empire after the 2002 death of the brothers' wheeler-dealer father Dhirubhai Ambani, could throw a spanner in the works.
On Saturday, Anil threatened legal action against his brother if he tries to block the deal, a Reliance Communications source said, as the battle in India's richest family heated up.
If Reliance Industries Ltd (RIL) "chooses to take any legal action, the same will be vigorously defended by Reliance Communications, and Reliance Communications will claim costs and damages from RIL," the source said. RIL insists a 2006 pact stipulates a decision on a majority stake sale in any of the companies belonging to the original group can only be taken after consultations with parties involved in the settlement.
"We feel we have a very strong and sound legal case," said a Reliance source. Reliance Communications, flagship of Anil's group, has accused RIL of seeking to "disrupt creation of one of the world's most valuable communications companies."
The brothers appeared to work well together when their father was alive but relations started souring after they inherited the oil-to-communications empire in 2002 from Dhirubhai, who started out as a petrol pump attendant.
The discord between the stockily built Mukesh and the athletic Anil, who is a vegetarian teetotaller, came to a head in 2004. The trigger came after Mukesh, known as a stickler for detail with a head for executing large projects, had the RIL board pass a motion telling all directors, including Anil, to report to him, saying it was his father's wish.
Anil, who had always been the more outgoing, appearing frequently on society pages and jogging along Mumbai's waterfront, fought back in what turned into a mud-slinging corporate soap opera.
The only thing the brothers agreed on was their reverence for the Ambani family matriarch Kokilaben, and they asked her to broker a deal which brought a temporary fraternal ceasefire and the carve-up of the Reliance conglomerate.
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