ADAG thrashes RIL's claim as 'meaningless'

Amid the ongoing war between the Ambani siblings, younger brother Anil's camp on Sunday thrashed Mukesh Ambani led Reliance Industries [Get Quote] claim of rights of first refusal in former's Reliance Communication by quoting a decision of the Union Cabinet.
Asserting that Reliance Industries claim was not even incorporated in the Articles of the Association of Reliance Communications [Get Quote], the Anil Ambani group official said based on the legal opinion the Union Cabinet had taken the view that there could be no restriction on transfer of shares of a listed company.
A communication by RIL claiming its first right of refusal to buy a majority equity in RCom had triggered the latest round of fight in middle of Anil Ambani Group company's negotiation with South African telecom major MTN group for an estimated $70 billion amalgamation deal.
"The Union Cabinet of Ministers based on the opinion by Attorney General of India and various Supreme Court decisions had firmly taken the view that any restriction on free transfer of shares in an Indian public listed company even if present in its Articles of Association, are illegal and unenforceable, as per section 111 A of the Companies Act.
"On that basis, RIL's claim is meaningless," he said, adding, "RIL's position is even worse as its alleged right of first refusal is not even incorporated in RCOM's Articles of Association."
In its communication to MTN and RCOM, Reliance Industries had threatened legal action and damages in case its Rights of first refusal was violated, to which Anil's Camp had vowed to give a befitting reply.
Responding to claims by RIL that it was 'confusing' the Family Settlement between Ambani brothers and the pact between the two groups, an RCOM spokesperson said that "RIL's reference to an agreement dated January 12, 2006 is misleading as RCOM has written to RIL the very same day ...and rejected the unilateral procedure adopted for finalising such agreements as being illegal. The Bombay High Court has upheld this stand by a judgement delivered on October 15, 2007."
The spokesperson said that anyway there was no basis for RIL to jump the gun and threaten MTN with litigation and damages as the discussions between RCOM and the South African entity were still on.
"Till the framework for the potential combination is finalised, there is no basis for RIL to speculate that the alleged right of first refusal would be attracted to the proposed transaction," the spokesperson said.
The battle between the two richest Indians had flared up after RIL wrote to MTN and ADAG, copies of which were sent to the bankers, cautioning that the amalgamation deal through reverse swap would tantamount to breach of RIL's first right of refusal to acquire a controlling stake in RCOM. In a strongly-worded reply, Anil's group warned to retaliate in case Mukesh-led Reliance Industries goes legal with its claim on the potential multi-billion dollar amalgamation deal.