SUPREME Court today ruled in favour of billionaire Mukesh Ambani in a gas pricing dispute with brother Anil, closing a chapter on a five-year battle that now gives the government control over setting prices.
The case has rattled investors and raised concerns over the immense influence of powerful businesses on government policy in Asia’s third-largest economy.
The Supreme Court ruled in favour of Mukesh Ambani, the world’s fourth richest man, and ordered the feuding brothers to renegotiate a gas contract between Reliance Industries and Reliance Natural first drawn up in 2005.
The case involves terms of a deal under which Reliance Industries was to supply Reliance Natural with 28 million standard cubic metres a day (mmscmd) of gas for 17 years at a rate below the government price.
“It has brought more clarity as far as policy is concerned that the government is the owner of the gas and has the power to decide prices. This makes government’s role more predominant, but votaries of economic liberalisation may consider this as a step backward,” said SC Tripathi, former secretary at the Petroleum Ministry.
Reliance Industries had argued the private deal cannot take precedence over government policy, which determines who can receive gas and at what price.
Anil Ambani, who claimed otherwise, rolled out a series of front-page advertisements in major newspapers accusing the government of taking the side of Reliance Industries.
The highly public feud within the country’s richest family has riveted India, and the outcome may set a basis for future regulations on gas pricing in India.
An unfavourable verdict for Mukesh, Asia’s richest man, could have meant Reliance Industries, India’s most valuable listed company, would have lost billions of dollars in potential profits on gas sales.
Mukesh Ambani is the world’s fourth-richest man with a fortune estimated by Forbes magazine at $29bn (£19.8bn), while his younger brother Anil Ambani, ranked 36th, is worth about $13.7bn (£9.3bn).
