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Supreme Court to take up gas dispute
NEW DELHI |
NEW DELHI (Reuters) - India's highest court on Monday said it would consider on Sept. 1 the dispute between Reliance Industries and Reliance Natural Resources over a gas sales-pact, and the government's attempt to step in.
Shares in Reliance Industries, which challenged a lower court ruling to supply gas to Reliance Natural at below-market price and had asked the government to intervene, ended up 5 percent.
Reliance Natural shares lost 2.65 percent as the overall market gained 3 percent.
The court made no final ruling and set a Sept. 1 date for the next hearing in the battle between the billionaire Ambani brothers, which has raised questions over the role of powerful business families in India's economy.
Top Indian conglomerate Reliance Industries (RIL), headed by Mukesh Ambani, and Reliance Natural, led by estranged brother Anil, have been fighting over terms of a gas-supply agreement struck when the Reliance empire was split in 2005.
The government made a petition over the weekend to intervene, arguing that the gas is its property and that the private pact between the Ambanis over the gas is not valid.
The court on Monday did not exclude the government from the proceedings for now. Reliance Industries wants the government in the case, while Reliance Natural opposes it.
"The government role in this case is not conducive to public interest," Ram Jethmalani, a lawyer for Reliance Natural, told reporters after the hearing.
The Bombay High Court ruled last month that Reliance Industries should supply gas to Reliance Natural at $2.34 per million metric British thermal unit (mmBtu) -- nearly half the $4.20 price in an interim court order in January.
"Based on today's events, there is anticipation that Reliance Industries will be the beneficiary," said D. D. Sharma, senior vice president, Anand Rathi Securities.
"One needs to look at the share prices prior to the Bombay High Court order in June. Reliance (Industries) stock has seen losses since then. I expect the situation to be reversed now."
The gas in dispute comes from the vast Krishna Godavari basin, and the feud had led to calls for the government to intervene given the importance of the resource to India's energy-starved economy.
"The government has gone to the court saying that this MoU (memorandum of understanding) which appropriates this gas as personal property, private property, is not correct," Petroleum Secretary R.S. Pandey told ET Now television.
"If this is allowed, then the entire gas will be at the discretion of the two brothers and the whole country will be looking up to them," he said.
Mukesh Ambani, 52, was ranked 7th by Forbes in its list of global billionaires in March, with a net worth of $19.5 billion. Anil, 50, was at No. 34 on the list with a $10.1 billion fortune.
Details of the family settlement, which was brokered by the Ambanis' mother, Kokilaben, have not been made public.
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