The Hindu Business Line : ADAG identifies deviations in gas pact, non-compete clause

THE board meetings of the four Reliance-Anil Dhirubhai Ambani Group companies have identified significant deviations from the agreed position in `gas supply agreement' and `non-compete agreement', sources said.

The deviations that have been pointed out are between what was agreed upon as per the overall settlement arrived at between Mr Mukesh Ambani and Mr Anil Ambani on June 18, 2005, and the agreements entered into by the four companies with Reliance Industries Ltd, while the companies were still under RIL's control, they said.

For instance, the board of Reliance Natural Resources is understood to have noted that the previously agreed position was that Reliance-ADAG will have the first option to get 40 per cent quantity of gas from the entire future reserves of RIL, including new discoveries of gas from new explorations, and/or bids as may be submitted from time to time.

The objective of this clause was that the benefits of future reserves would also flow to 22 lakh shareholders of RNRL.

However, as per the agreement that was signed when the company was under RIL's control, the above option has been `unilaterally' restricted to RIL's blocks acquired only up to June 18, 2005, and all future acquisitions of blocks by RIL have been excluded.

This is only one of several such variations in the gas supply agreement, the sources said.

Similarly, with regard to the non-compete agreement, the boards noted that the previously agreed position was that the business relating to airports and airports infrastructure was exclusively reserved for Reliance-ADAG, without any exceptions. However, as per the agreement entered into with RIL, that is now disputed, RIL can enter the business of airports and airports infrastructure - which is claimed to be incidental/integral or necessary for any of its businesses, or, where ADAG has not been successful in privatisation of airports.

According to the sources, these exclusions are again amongst the significant deviations from the previously agreed position. The boards have decided to discuss and finalise appropriate amendments in all agreements with RIL, to bring the same in line with the previously agreed position on all issues, they said. The third area where agreement was entered into between RIL and the four companies referred to `brand agreement' - on sharing the Reliance brand and logo.

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