Days before its listing on March 6, the Anil Ambani-owned Reliance Communication Ventures Ltd has accused Reliance Industries of reneging on its commitment to provide Rs 3,100 crore (Rs 31 billion) in cash.
An information memorandum filed by Reliance Communication Ventures to the stock exchanges said Reliance Industries transferred only Rs 372.08 crore (Rs 3.72 billion) in cash and the balance Rs 2,727.92 crore (Rs 27.28 billion) in the form of deep discount bonds of Reliance Communication Infrastructure held by the Mukesh Ambani-owned company.
Reliance Industries transferred the amount to Reliance Communication Ventures, when it was under its control, without informing the representative of the Anil Ambani group on the board, the company mentioned in the information memorandum.
"This has reduced the financial flexibility of the company," Reliance Communication Ventures said. The reconstituted board had decided to take "appropriate action" to restore the position as agreed to earlier, it added.
The information memorandum makes several other allegations as well. For example, it said Reliance Industries had not yet signed the agreement with it for supporting capital goods imports to the tune of Rs 10,000 crore (Rs 100 billion).
"As part of the reorganisation of the Reliance group, as agreed between Mukesh Ambani and Anil Ambani, the former has to continue support to Reliance Communication Ventures and its affiliates in the shape of export obligations against import of goods and services under the EPCG scheme of the government, up to Rs 10,000 crore from April 1, 2005 to March 31, 2007," it said.
"But Reliance has not yet executed any agreement in connection with this obligation. The reconstituted board has decided to take appropriate steps to enter into appropriate agreements with Reliance in line with the agreed position to protect the interests of the company and its shareholders," Reliance Communication Ventures said.
In addition to the trademark and non-competition pacts, Reliance Industries had to sign three more agreements with Reliance Communication Ventures for shared services, property lease and licences.
Reliance Communication Ventures said the agreements signed between Reliance Industries and it on January 14, when it was under the Reliance control, "do not reflect the agreed position", and hence, it would take appropriate steps to amend the pacts.
Under the shares services agreement executed between Reliance Communication Ventures and Reliance Industries on January 14 this year, the latter agreed to continue providing certain services and facilities, including conversion of resin into ducts and certain software to the telecom businesses.
Certain agreements for lease were also signed between January 12 and January 25, 2006, under which Reliance Industries agreed to lease or use 12 properties for periods up to 99 years.
In addition, Reliance Industries and its group firms entered into five lease and licence agreements permitting Reliance Communication Ventures to use some immovable properties for three years on commercial terms.
Earlier, Reliance Natural Resources Ltd, the gas-based energy undertaking of the Reliance-Anil Dhirubhai Ambani Group, had charged Reliance Industries with violations of agreement on non-competition, sharing of trade mark and gas supply between the two groups.
Reliance Communication Ventures holds 45 per cent stake in Reliance Communication Infrastructure, 45.34 per cent stake in Reliance Infocomm, 35.60 per cent stake in Reliance Telecom and 3.98 per cent stake in WorldTel (Bermuda).
Sources close to the group said Anil Ambani might announce future telecom business plans on Sunday, a day before the listing of the holding company.
He is expected to provide an insight into the future plans of CDMA-based telephony service provider Reliance Infocomm and GSM service provider Reliance Telecom, including its expansion, rollout and funding among others.
Reliance Infocomm has over 18 million customers and has a pan-India presence, while Reliance Telecom has around 1.73 million subscribers, with operations across eight of the total 24 telecom circles in the country.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Discussion Group
