MTN-Reliance Comm deal may be lost in the Mukesh-Anil feud
08 July 2008
Mumbai: South African telecom firm MTN Group may walk out of a deal with Reliance Communications amidst an ongoing dispute between the Ambani brothers – Mukesh and Anil – over the MTN stake.
Anil Dhirubhai Ambani Group (ADAG) firm Reliance Communications began talks with South African telecom firm MTN about a tie-up in May. The talks have since taken a new turn and could now lead to a reverse takeover of Reliance Communications with its chairman Anil Ambani becoming the biggest shareholder in MTN.
Even as the two sides are discussing a business combination, the Mukesh Ambani-led Reliance Industries has staked a right of first refusal on Reliance Communications shares.
Reliance Communications maintains the claim is untenable but it agreed to meet Reliance Industries next week ''to clarify any doubts."
The meeting is not part of "conciliation" or "dispute resolution,'' asserts Reliance Communications.
Reliance Industries had called a meeting of Reliance Communications officials on Monday to sort out matters but said the latter refused to co-operate. Reliance Industries now plan to ''adopt appropriate proceedings against Reliance Communications, as advised."