24th May 2010
After Dhirubhai Ambani's death in 2002 the two Ambani brothers Mukesh and Anil Fell apart in 2006 and carved up their father business empire.
The elder brother Mukesh took control of flagship Reliance Industries, which has interests in petrochemicals, oil and gas exploration, refining and textiles. He has since made foray into various other businesses like retail ventures among other things.
The younger brother Anil formed a company called Anil Dhirubhai Ambani Group (ADAG) which got telecoms, power, entertainment and financial services. The Group includes Reliance Communications Ltd , Reliance Infrastructure Ltd , Reliance Capital Ltd , Reliance Natural Resources Ltd (RNRL) and Reliance Power Ltd.
When the final settlement was reached between the two borthers they signed a non compete agreement. Which meant they would not encroach or start ventures in he fields of one another.
Both brothers went to court because of controvesy over gas pricing issue. This was regarding the gas to be supplied by relaince to ADAG's Reliance Power.The Supreme Court ruled in Mukesh Ambani's favour over gas pricing.
Now after the court ruling the brothers again reached a settlement on Sunday to cancel all existing non-compete pacts which the groups had signed in 2006.
Reliance ADA Group said in statement the two groups have entered into a new and simpler non-compete pact only for gas-based power generation. This is a first step towards the resolution of dispute.
This seems more positive for Reliance Industries than R-ADAG group, because this gives Reliance an opportunity to look into expansion in other areas, which they were not allowed to do earlier such as telecom.
The stock market seemed happy at the news as the benchmark Nifty started the day on a strong note and hit the 5000 mark on Ambani brothers patch-up news.
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