Legal expenses multiply for Ambanis

The court battle over the gas-sharing dispute is turning out to be both time consuming and costly for the Ambani brothers, as their group firms show a multi-fold increase in legal expenses over the years.

Anil Ambani group firm RNRL first filed a case against RIL in Bombay High Court in November 2006, alleging violation of a family pact about supply of gas from elder brother Mukesh-led RIL’s Krishna-Godavari gas fields.

Since the financial year 2006-07, RNRL’s legal and professional fees have surged nearly five-fold from Rs 3.12 crore to Rs 15.27 crore in the latest fiscal 2008-09.

On the other hand, RIL’s ‘professional fees’, which includes legal fees, rose from Rs 550.22 crore in 2006-07 to Rs 675.84 crore in 2007-08. The figures for the year 2008-09 could not be ascertained as the company’s annual report has not been released.

When contacted, both the companies declined to disclose the specific legal fees related to their gas supply dispute, which has now reached the Supreme Court.

“As a policy, we do not comment on fees for specific legal cases,” a spokesperson for RNRL said.

Asked about the legal expenses incurred by RIL during the past three years and those towards the company’s legal battle with RNRL, as also in the case against state power utility NTPC, a Reliance Industries spokesperson said: “As a policy, we do not comment on details of any specific fees. Various expenses incurred towards professional services as a part of our operations, including legal services, are recognised under the head of Professional Services in our financial statements.”

In case of RIL, the professional fees more than doubled from Rs 259.33 crore in 2005-06 to Rs 550.22 crore in 2006-07. Thereafter, it increased by nearly 23 per cent to Rs 675.84 crore in 2007-08.