The defamation suit was filed by Anil Ambani in September 2008, shortly after Mukesh's Reliance Industries (RIL) put a spoke in his attempts to acquire South African telecom giant MTN that year
In the spirit of truce arrived at with his elder brother, Anil Ambani today dropped a Rs10,000 crore defamation suit against Mukesh Ambani in the Bombay High Court, reports PTI.
"Yes, we have withdrawn the suit claiming Rs10,000 crore as damages", a Anil Dhirubhai Ambani (ADA) Group spokesman told PTI.
The defamation suit was filed by Anil Ambani in September 2008 shortly after Mukesh's Reliance Industries (RIL) put a spoke in his attempts to acquire South African telecom giant MTN that year.
RIL had sent a legal notice to MTN asserting its right of first refusal on stake in Reliance Communications (RCom), a move that forced the Anil Ambani group to drop plans for a merger with the South African mobile company.
Incidentally, the defamation suit was dropped within days of RCom deciding to offload 26% stake in a strategic sale.
Anil had dragged his brother to court, alleging that Mukesh had defamed him in an interview to New York Times (dated 15 June 15 2008) that was reproduced in two leading Indian newspapers. The suit against the newspapers has also been withdrawn.
The Ambani brothers signed a truce agreement late last month, ending a bitter public and legal battle despite arriving at a family settlement to divide the Reliance empire in 2005 based on a formula worked out by mother Kokilaben.
As part of the truce, the two brothers decided to scrap a non-compete agreement between their respective groups, a move that would give each side flexibility to utilise resources more efficiently and enter businesses hitherto inaccessible.
They had also pledged to expeditiously renegotiate a gas supply agreement on the lines of the Supreme Court verdict of 7th May.
Announcing the truce, the two sides had said, "RIL and Reliance Anil Dhirubhai Ambani group are hopeful and confident that all these steps would create an overall environment of harmony, cooperation and collaboration between the two groups, thereby further enhancing overall shareholder value for shareholders of both the groups".
While RCom has already announced its intention to sell 26% stake, as part of efforts to raise resources, there is speculation that cash-rich RIL could also venture into telecom arena soon and may partner Venugopal Dhoot-led Videocon's telecom arm.
The Ambanis had parted ways in June 2005, and out of four of the last five years they have been engaged in a legal row over supply of gas from Mukesh-run RIL to Anil Ambani group's Reliance Natural Resources Ltd (RNRL).
A spokesperson for Mukesh Ambani's RIL declined to comment.
The defamation case itself was based on an interview given by Mukesh Ambani to the leading American publication wherein the New York Times quoted him as saying that a network of lobbyists and spies were overseen by his brother before they split.
"What most distinguishes Reliance from its rivals is what Ambanis friends and associates describe as his 'intelligence agency' a network of lobbyists and spies in New Delhi who they say collect data about the vulnerabilities of the powerful, about the minutiae of bureaucrats' schedules, about the activities of their competitors," the New York Times had said.
Mukesh is purported to have said in the interview that all such activities were overseen by his brother before they split, and had since been expunged from his tranche of the company. "We de-mergered all of that," Mukesh was quoted as saying.
The Indian Railways has introduced two new schemes for facilitating greater privatisation in freight movement. According to industry sources, existing container train operators are positive over the scheme, but want to be sure about the fine print
Last week, the Indian Railways announced the opening up of freight train and terminal operations to private firms. According to industry officials, existing container train operators will be interested in this offer. However, this time, companies wish to study the offer thoroughly first. Private operators had got a raw deal when rail containerisation was privatised earlier.
Under the new private freight terminal (PFT) and special freight train operator (SFTO) scheme, the ministry has allowed private firms to use the Indian Railway’s network for commodity transport and to develop freight terminals. Private players will be allowed to set up private freight terminals and also operate freight trains. The ministry plans to extend this to the existing registered container train operators and users having private sidings on private land.
“It is a good move for the existing container train operators. However, we need to see whether there is any extra cost involved as license (fees) to operate in the freight arena. We have been demanding that we be allowed to operate without any additional charge on the existing license,” said RC Dubey, president, Container Train Operators Association. The license fee under the SFTO scheme ranges between Rs5 crore and Rs15 crore depending on the commodity.
“We are still studying the proposal for both the schemes—PFT and SFTO. It seems to be quite reasonable. We will have to decide whether the rate at which the movement of goods would be offered will be reasonable, depending on factors like the cost of providing these specialised wagons. We are looking at this market and are also looking at acquisitions in this segment,” said Ajay Mittal, chairman and managing director, Arshiya International. The company is an existing private container train operator.
Mr Mittal declined to divulge further details on the planned acquisitions in the private container train operator (PCTO) segment. While Arshiya seems to be positive on the scheme, according to sources, other companies that could look at entering this segment are Hind Terminals, Innovative B2B, Boxtrans and Tribco.
Under the PFT policy, operators will be able to book and handle all traffic excluding outward coal, coke and iron-ore traffic. The revenue sharing for greenfield projects would start after five years of commissioning the terminal and after two years of commissioning a brownfield project. The revenue-sharing model would be 50% of the then prevailing rate of terminal charge leviable at goods sheds or Rs10 per tonne, whichever is higher. Revenue sharing will be annually increased by indexing it to whole price index (WPI) increase.
Mr Mittal pointed out that some clarification is still awaited on the PFT. Clarity has been requested on whether container rail traffic policy will be in conjunction with the PFT policy.
The SFTO scheme offers a freight rebate of 12% for a period of 20 years till the recovery of investment, whichever is earlier. This could prove to be beneficial to private operators. It also addresses serious issues like empty return load, which would be exempted from freight charges by the Indian Railways. The private operator will be free to charge his customer freight and handling charges.
The SFTO will be operated for movement of goods like bulk fertilisers, cement, fly ash, chemicals, petrochemicals, steel, etc. A major concern with logistics companies is the fact that the automobile segment has not been included in the scheme. Inclusion of the auto sector was being considered earlier.
Mr Dubey also has his own apprehensions over the success of such schemes. “The scheme should not end up a failure like the once-proposed ‘own your wagon’ scheme,” explained Mr Dubey.
The ‘own your wagon’ scheme was introduced in 2005. The scheme focused on assured supply of a guaranteed number of rakes every month to a customer based on the number of rakes procured by him with freight concessions. Private firms faced turnaround problems due to congestion.
On the face of it, the new scheme looks favourable for private firms. They have some time to decide on an entry into this segment. Earlier, while container operations were being privatised, the license was operational only for a month.