Reliance Industries, controlled by Indian billionaire Mukesh Ambani, has taken the first step towards enforcing a claimed right of first refusal on the sale of shares in Indian mobile operator Reliance Communications to South Africa’s MTN. According to the Financial Times, Reliance Industries has written to Reliance Communications, controlled by Mukesh’s younger brother Anil, to begin talks over the claim in a process that could end up in court and which is threatening to scupper one of the biggest telecoms deals of recent times. In a statement Reliance Industries said it had ‘invited’ Reliance Communications to negotiations aimed at settling the dispute over the claimed right outside of court. The talks are a mandatory first step in any dispute resolution process under an agreement Mukesh says the brothers signed in 2006.
Reliance Communications is currently the subject of a takeover bid by MTN, under which Anil Ambani is planning to swap most of his 66% stake in India’s second-largest wireless operator for a controlling stake in the South African group. Exclusive talks between Anil Ambani and MTN had been due to close by Tuesday 8 July. The two sides are looking at extending this deadline by two to three weeks to discuss a revised structure that people familiar with the deal say would ringfence the communications group against Mukesh Ambani’s claims.