Deal in balance as feud escalates

Mukesh Ambani-owned Reliance Industries Limited (RIL) Thursday started proceedings against younger brother Anil's Reliance Communications (RCom), stating that the company had refused to participate in meetings to resolve a dispute concerning ownership of shares, the Hindustan Times reported.

Mukesh threatened legal action weeks ago, saying he had the first right to buy a stake in Anil's firm that slowed down RCom's negotiations with MTN.

RIL nominated BP Jeevan Reddy, a former judge of the Supreme Court, as an arbitrator to resolve the disputes with RCom, the report said.

"RCom has refused to participate in the conciliation meetings under the alternate dispute resolution provisions contained in the non-competition agreement," an RIL spokesperson was quoted as saying by the newspaper.

An RCom spokesperson dismissed the RIL move saying arbitration could happen only when "both" parties refer the dispute to a person outside the court.

"There is no scope for arbitration as there is no dispute or occasion for any conciliation process," he said.

"It is just a mala fide design to derail the MTN discussions. RIL's notice for arbitration proceedings is legally and factually unwarranted," he added.

MTN, South Africa's largest mobile phone network operator and RCom, the second largest Indian telecom company, started talks on May 26 that could create a $70bn global wireless group operating in about two dozen countries.

The exclusivity period for discussions between the companies is due to end on Monday. According to reports in the local media, Anil wants to swap most of his 66% in RCom for a 51% stake in MTN.

Mukesh and Anil are the world's richest brothers, with an estimated wealth of $85bn between them, according to the Forbes Magazine.

Mukesh, ranked the fifth richest man in the world with a net worth of $43bn, is closely followed by his estranged brother whose fortune is estimated at $42bn. - Sapa