RIL arbitration against RCom – Ambani Brothers Corporate Battle to Intensify

Reliance Industries (RIL) led by the elder Ambani bother Mukesh has initiated arbitration proceedings against Reliance Communications (RCom), the company led by the younger brother Anil.

RIL has nominated Justice B P Jeevan Reddy as arbitrator for disputes with RCom, which is in talks with the South African telecom giant MTN for a merger deal.

RCOM and MTN were negotiating a possible deal that could create a $70-billion entity. However, RIL claimed that it holds the right of first refusal for a majority holding in the ADA group company and threatened legal action in case its rights were violated.

Why Mukesh wants to Block RCom-MTN Deal:
RCom will have a comparable EBITDA to RIL if not more than RIL, once Rcom and MTN are merged. An unspoken rule in the Ambani clan is they have to be India’s First Business Man and hence this race. [Recall what happened when Azin Premji overthrown Dhirubhai Ambani in 2000 ?]

What’s Happening in the Backdoor ?
Anil Ambani’s friends in Politics came to his aide at the right time. We learn from our Political Analysts that Mukesh was called to Delhi by Mr. Singh [SP] to tell him of the consequences if he blocked Anil’s Telecom deal by imposing windfall profit on RIL and get RPL under the tax net [currently enjoys EOU status]

However, Mukesh’s arbitration proceedings against Anil tells that the corporate battle is going to intensify. Who knows GSM players in COAI may already be backing Mukesh Ambani since Anil is influencing a lot in the Power corridors of Delhi through his aides. Your Views ?