Industrialist Anil Ambani on Tuesday dared the petroleum ministry to take back the ownership of gas fields from Reliance Industries Ltd if it seriously believed that terms of the contract were violated by Mukesh Ambani-led firm, which he alleged was wanting to make a super-profit of Rs 50,000 crore (Rs 500 billion).
In a scathing attack on the ministry, Anil told the shareholders of group firm Reliance Natural Resources Ltd that "it is evident that the apparently biased stance commenced in 2006, coinciding with the changes in the ministry. I'm sure all private companies in India wish that if they make commercial decisions, they wish to get out of, they too had a saviour to help bail them out as in the case of RIL."
While Murli Deora, whose ministry has sought annulment of the gas supply contract between RIL and RNRL in the Supreme Court, declined to comment, Petroleum Secretary R S Pandey hit back saying that Anil's gas pricing formula would make the country subservient to RIL.
Alleging volte-face by the petroleum ministry, Anil said that though it stated in Parliament that it had no role in commercial dispute or in fixing the sale price of the gas, it has now gone to the Supreme Court challenging a commercial contract between two corporate entities.
"The bogey of sovereign ownership is being raises with the sole purpose of attempting to bail out RIL and help them renege on their contractual commitments," he said.
In an uncharacteristically long speech, Anil questioned the petroleum ministry's stand that it had gone to the Supreme Court after knowing the full content of the family agreement only from Bombay high court order, saying it had all the relevant details of RIL-RNRL gas deal since 2006.
When contacted, spokesperson of RIL, which Anil Ambani alleged was firing from the petroleum ministry's shoulders to renege its contract with NTPC and RNRL, declined to comment saying, "the issue is before the Supreme Court and sub judice."
While Anil was addressing company shareholders and appraising them of the developments related to gas supply contract, which according to him was primary asset and contributed to company value, Mukesh Ambani was in New Delhi meeting top government officials and Cabinet ministers.
Commenting on the issues raised by Anil, petroleum secretary said: "Full implication of the family MoU (that split Dhirubhai Ambani empire between bothers Mukesh and Anil) were known only after the Bombay high court recorded the MoU" and the petition in the apex court only sought to declare null and void the part of family agreement that dealt with gas.
Anil, however, alleged that the ministry had also gone against the position taken by the Empowered Group of Ministers, which in September 2007 took full details of RIL-RNRL deal and recognised the rights of the parties, when it recorded that its decisions were without prejudice to RNRL-RIL and NTPC-RIL cases.
It was only after the adverse verdict of Bombay high court against RIL that the petroleum ministry suddenly decided to intervene in the purely corporate dispute, using discretion without even seeking the approval of the Cabinet, Anil said.
He quoted a law ministry circular of November 2008 stating that in all sensitive matters, written submission or affidavit should be filed in the Supreme Court only after the same were vetted by the Department of Legal Affairs, and said that that oil ministry had reportedly not taken the requisite approval.
"Frankly, if the petroleum ministry is genuinely aggrieved and if they honestly believe that RIL has violated the terms of PSC (production sharing contract) by allegedly trying to divide the national property, why don't they exercise their powers and terminate the PSC and take back the ownership of gas fields," he said.
As per the PSC, RIL would get Rs 49,500 crore (Rs 495 billion) against the government's Rs 500 crore (Rs 5 billion) from the initial revenue of Rs 50,000 crore and added that "99 per cent of all revenue and profits will go to RIL and only a measly 1 per cent would accrue to the government," he said.
Anil, fighting a legal battle to obtain gas at $2.34 per mmBtu from RIL as part of the family settlement that the two brothers had reached in June 2005, said that the global gas prices had crashed 80 per cent and the price fixed by the government at $4.2 per mmBtu was 'exorbitant' and against public interest.
Image: Anil Ambani (left) with brother Mukesh in happier times.
Photograph: Reuters
