The top legal representatives of Reliance Industries Ltd (RIL) and Reliance ADA group have reportedly started re-negotiations in Mumbai as directed by the Supreme Court, on the contentious family MoU.
This MoU was signed between Mukesh and Anil Ambani in 2005. It is supposed to have laid down the parameters for the division of the Reliance empire between the two brothers. The SC had given the two warring brothers six weeks to renegotiate the MoU and get in ratified by the court in two weeks after that.
The MoU, which no one is reported to have seen hitherto, became the bone of contention as Anil Ambani, who got the power business insisted that he should be given gas at $2.34 per million British thermal unit, for 17 years for his proposed gas based plant at Dadri in Uttar Pradesh. This was mentioned in the MoU.
Mukesh said that was not possible as the government had decided that the price of gas should be $4.34 per unit and the quantity and period for which he would get gas would be decided by the government, which was the owner of the gas. Mukesh’s stand was upheld by the Supreme Court.
While it is not known on what points the MoU would be renegotiated, analysts feel that Anil does not have much bargaining leverage on pricing.
According to them, all he will have to do is give the exact programme he has for power generation and state his requirements and when he intends to implement the project.
This would then be forwarded by RIL to the government. Mukesh also has no control over the pricing of the gas. It is the government that will also decide who will get the gas on a priority basis.