PTI
Chandigarh, Jun 24: The Ambani brothers may be heading for a showdown again. Anil Ambani’s group has written a letter to Reliance Industries Limited (RIL), owned by elder brother Mukesh, objecting to its plan to build a 2,000-MW power plant in a special economic zone (SEZ) in Haryana.
Anil’s group, Reliance Energy Ltd (REL), claims the plant will violate the non-compete agreement RIL has signed with it. RIL Chairman Mukesh Ambani has announced the 2,000-MW captive plant will be constructed as part of the Rs 25,000-crore SEZ.
Anil and Mukesh signed an agreement on June 18, 2005, according to which the former would have the exclusive right to do business in the power sector.
But on Monday RIL company, Reliance Ventures Ltd, and the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) signed the SEZ deal and Mukesh announced the power plant on the occasion.
REL officials confirmed sending the letter but refused to comment. Sources close to RIL said there was no violation, as anything that was incidental to a business was within their right.
HSIIDC Managing Director Rajeeve Arora said he had not seen the letter. Haryana government sources said the agreement for the joint venture, in which HSIIDC is a 10 per cent partner, was on and the SEZ will not be affected because of the controversy.
Sources said REL has sought to raise a few issues on the non-compete agreement, besides violation of the same.
One of the issues relating to non-disclosure of the particular terms of the non-compete agreement to the state government when signing the deal for SEZ, they said, adding that by itself this was another violation.
A copy of the communication has also been sent to Haryana Chief Minister Bhupinder Singh Hooda, sources said.
However, it is being pointed out that a captive power plant in the SEZ could not be a violation as the same has been done in Reliance Petroleum, a company floated for the expansion of RIL's refinery in Jamnagar.
In the public offer document of Reliance Petroleum, which was listed earlier this year, a captive power plant has been proposed and a similar thing in other projects could not be a violation of the non-compete agreement.
Post-division of the Reliance empire, the two brothers had signed an agreement that provided for exclusivity of certain businesses for each side with another non-compete agreement providing for restraints.
According to the agreement, Mukesh Ambani's group would exclusively deal in petroleum and petrochemicals and Anil in power, finance and telecom business.