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| RIL board was fully aware of family deal, Jethmalani tells SC |
| BS Reporter / New Delhi Nov 25, 2009, 01:27 IST |
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Reliance Natural Resources Ltd (RNRL) today told the Supreme Court that the details of the family memorandum (MoU) splitting the industrial empire, including the gas supply agreement between Mukesh Ambani and Anil Ambani, was known to the board of Reliance Industries Ltd (RIL) and, therefore, should be binding on the latter.
The RIL board knew and approved the settlement scheme worked out by Kokilaben Ambani between her two sons. It also appointed experts to implement the demerger scheme, RNRL counsel Ram Jethmalani told the three-judge Supreme Court Bench headed by chief justice K G Balakrishnan. In the course of his arguments, RIL counsel Harish Salve had maintained that the RIL board was unaware of the MoU.
Jethmalani said the RIL board, in its meeting on June 18, 2005, had accepted the resignation of Anil Ambani as the company’s vice-chairman and managing director. On the same day, the Board had passed a resolution stating that if the scheme was not implemented within 18 months, Anil Ambani would be reinstated to his earlier position of VC & MD.
RIL and RNRL have moved the apex court on the June 15 decision of the Bombay High Court, which had asked RIL to provide 28 million standard cubic metres per day (mscmd) of gas to RNRL at $2.34 per unit for the latter’s proposed power plant at Dadri. RIL, however, contends that it cannot do so in view of the government’s gas utilisation policy. It also said it cannot sell at a price lower than the government-set one of $4.2.
Jethmalani also said that through the negotiations between the two companies following the formalisation of the demerger scheme, there was no reference to any power of the government to intervene in the contractual agreement between the two companies.
There was no ambiguity in the agreed price, tenure and quantity of natural gas to be supplied by RIL from the KG Basin.
The only issue in the case was the absence of a bankable agreement. The Dadri plant requires investment of Rs 22,000 crore and to raise this money, we needed a bankable agreement, he said.
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