New Delhi: Two days after Anil Ambani’s Reliance Communications Ltd, or RCom, and South Africa’s mobile phone services firm MTN Group Ltd together decided to end merger talks, legal experts say arbitration proceedings by estranged elder brother Mukesh Ambani may not prevent any future deals that his younger sibling would want to take up.
A person with knowledge of the development, who did not want to be identified, said the deal for a possible merger was all done, but MTN decided to call it off due to the legal issues involved. “MTN was not convinced whether Anil Ambani would be able to get through the legal issues. In fact, the arbitration notice issued to RCom was a jolt to them, and that’s when they decided to call it off,” this person said.
A legal expert said the arbitration notice issued by Mukesh Ambani’s Reliance Industries Ltd, or RIL, would fail automatically since the talks have been called off. “Only specific disputes under an agreement can be referred for arbitration,” Vyapak Desai of Mumbai-based legal firm Nishith Desai Associates said.
Another legal expert said Mukesh Ambani cannot prevent RCom from buying any other company. “Anil Ambani will have to consult RIL before selling shares to another company. If he does not, then RIL has the right to challenge the decision,” said Anand Prasad, partner at legal consultant firm Trilegal.
On Saturday, AAA Com, the investment firm of RCom promoter Anil Ambani that owns 63.38% equity in the mobile phone company, said in an emailed statement that it was not party to the 12 January 2006 non-compete agreement between RIL and RCom, and was free to deal with RCom as it deemed fit. An RCom spokesman declined to comment on future acquisition plans, and the RIL suit.
The weekend developments are expected to have a positive impact on RCom’s shares when the Bombay Stock Exchange opens for trading on Monday.
“The deal is not happening. That will be bit of a relief for the shareholders,” said Ambareesh Baliga, vice-president at Karvy Stock Broking Ltd. “The stock should rise on Monday.”
(Devidutta Tripathy of ‘Reuters’ contributed to this story.)
India, Brazil to push for fair play in ‘now or never’ deal
Geneva: Backed by more than 100 countries, India, Brazil and South Africa will take on the rich nations to get a fair trade deal at the World Trade Organization (WTO) meeting of key trade ministers beginning on Monday.
Against the backdrop of high crude oil prices and global food crisis, WTO has convened the five-day mini-ministerial meeting with a hope that closing the Doha Round of talks can reinvigorate the world economy which is in the grip of a slowdown.
“The positions are pretty hard on all sides,” India’s commerce and industry minister Kamal Nath said, giving a sense of the mood in the run-up to the ‘greenroom’ negotiations.
WTO had launched negotiations among its members for new agreements to open world trade which should be fair and without distortions. The negotiations, launched at the Qatari capital in 2001 and known as the Doha Round were to complete by the end of 2004 for a new trade regime.
However, wide differences over the extent to opening the markets blocked several rounds of talks, including the ministerial meetings in Cancun and Hong Kong.
For a collective bargain, the developing countries which dominate the 152 WTO membership have aligned themselves into different groupings such as G-20, G-33 and Nama (Non-Agriculture Market Access)-11.
Meanwhile, World Bank president Robert Zoellick on Sunday urged trade ministers to push for a breakthrough in this week’s WTO talks, saying it was “now or never” to reach a deal.
Zoellick said progress on agricultural issues in the meeting would bolster confidence in a world economy strained by soaring food and energy prices and a financial crisis.
“It has never been more important for WTO members to move forward on the Doha Development Agenda,” Zoellick said in a statement before the talks, which will focus on tariff and subsidy cuts. PTI
(‘Reuters’ contributed to this story.)
Sahara Fin appoints independent directors
Mumbai: Sahara India Financial Corp. Ltd, India’s largest residuary non-banking company, has decided to appoint a new team of independent directors approved by the Reserve Bank of India, or RBI. The people nominated by the central bank for the job includes the chief executive of Indian Banks Association, H.N. Sinor; former president of the Institute of Chartered Accountants of India, T.N. Manorahan; and a former IAS officer from the Maharashtra cadre.
Sinor confirmed his appointment as an independent director on the board of Sahara India Financial to ‘Mint’. However, ‘Mint’ could not contact other independent directors immediately for response. Last month, the central bank had ordered Sahara India Financial to wind down its public deposit base by 2015 in phases.
The regulator had also asked the firm to reconstitute its board with 50% independent directors nominated by RBI within 30 days of 16 June. According to RBI’s directive, the appointment of these independent directors will continue until all depositors are repaid in full. khushboo Narayan
Bundled health care, insurance for Jharkhand
Bangalore: City-based hospital, Narayana Hrudalaya Pvt. Ltd, or NHPL, has signed an agreement with Tata Steel Ltd to provide health care, bundled with health insurance, in the state of Jharkhand.
To begin with, two Tata Trust hospitals, Ardeshir Dalal Memorial Hospital and Jamshedpur Eye Hospital, and one new 500-bed heart hospital to be commissioned by NHPL in the next two months, will start a 5,000-bed health city in Jamshedpur.
“We intend to make this the first city in the country where every resident is covered for health care,” said Devi Shetty, lead promoter of NHPL, who thinks with 1.5 million population, Jamshedpur can serve as an ideal pilot city.
NHPL plans to replicate Karnataka’s micro health insurance programme called Yashashwini, where nearly three million farmers are covered for health care, in other parts of the country.
Earlier this year, NHPL raised Rs400 crore by divesting 25% stake to investment banks American International Group Inc. and JPMorgan to build a chain of so-called health cities in most state capitals. Seema Singh