Firing another blistering salvo in the first major outbreak of hostilities after last year's family settlement, the Anil Ambani-led Reliance-ADA group on Sunday claimed that it was fully within its rights to source and tie up for the supply of gas for its power projects.
The group asserted that it could set up gas pipelines and undertake city gas distribution in Delhi and Mumbai as all three businesses had been exclusively reserved for it under the terms of the non-compete agreement signed with Reliance Industries Ltd on January 12, 2006.
"As part of the power business of the R-ADA group (R-ADAG), it is fully empowered by the agreement to set up captive fuel-supply projects. These include setting up gas pipelines, participating in and acquiring gas or coal-bed methane blocks from the government under any process that may be initiated by it. R-ADAG can also enter into joint ventures or partnerships with gas producers for assuring gas and fuel supplies to its existing and future power projects," sources in the company said.
"Our plans to enter the gas-pipeline business, gas exploration and distribution of city gas in Mumbai and Delhi are not a violation of the non-compete agreement," sources said.
A Reliance Industries spokesperson said the company was evaluating the claims and would provide its response.
R-ADAG sources added that the RIL-MDA group had unilaterally executed a non-compete agreement dated January 12, 2006, while the ADAG companies were still under the control of the RIL-MDA group.
"This agreement is signed on both sides by RIL-MDA group nominees. Even the unilaterally executed non-compete agreement is in line with the agreement of June 18, 2005, and categorically provides that these businesses can be entered into by us," sources said.
R-ADAG sources claimed the settlement and agreement between Mukesh Dhirubhai Ambani and Anil Dhirubhai Ambani on June 18, 2005, specifically provided that airports would be with the Anil Ambani group only.
The demerger scheme approved by the Bombay High Court on December 19, 2005 provided that suitable non-compete agreements would be entered into to give effect to the family agreement.
"At no stage till January 2006, did Reliance Industries ever claim that they could enter the airports business," they added.
