Home BusinessGas row: RIL counters RNRL's claim on MoU approval
Mukesh Ambani group firm Reliance Industries (RIL) today told the Supreme Court that its directors have filed the affidavits in the gas row to counter Anil Ambani"s contention that the family MoU was approved by the RIL board.
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RIL said that seven of its directors have filed counter affidavits to negate the submission made by Reliance Natural Resources (RNRL) that they had seen the MoU and it was approved by the board.
Senior advocate Harish Salve, appearing for RIL said that the MoU was never approved nor was it part of the Board meeting.
"You (RNRL) withdraw that para from the Special Leave Petition, we will will withdraw the counter affidavit of seven directors," he submitted before a Bench comprising Chief Justice K G Balakrishnan and Justices B Sudershan Reddy and P Sathasivam.
Salve was responding to the allegations by RNRL"s counsel Ram Jethmalani that RIL was making submissions on the points which were not the part of records in the Bombay High Court.
Jethmalani had said the contents of affidavits filed by RIL directors were also not the part of record in the High Court.
To drive home his point, Jethmalani said, "Everything I argue will be justified by the records before the High Court."
RNRL in its petition had said that "the existence of the family MoU has been recorded, accepted and approved by the RIL board of directors".
The Ambani brothers are locked in a bitter battle over the supply and price of the gas from KG basin.
While RNRL is seeking gas at a committed price of $2.34 per unit, RIL says it cannot honour the commitment made in the MoU due to government"s pricing and gas policies.
RIL gave a detailed chart to show how profits of the group and revenue of the government would be hit if the gas was supplied to RNRL and NTPC at a lesser price than the approved price.
The RIL counsel said if the entire production of 80 mmscmd was sold at the government approved price of $4.2 per mmBtu, then the government share over the period of 13 years will be around $8.44 billion against RIL net surplus of $16.28 billion after the cost recovery.
Salve said RIL, which has invested $9.41 billion in the development of KG Basin, will earn a net cash flow of $7.95 billion at $4.2 per mmBtu over 16 years after deducting interest and income tax.
However, he said that if the government approved the gas price at $2.34 per mmBtu for the entire produce, the government"s share will be reduced to $1.08 billion, a reduction of $7.36 billion and that of RIL will reduced to $2.43 billion from $7.95 billion over this period after deducting liabilities.
RIL said that it was obliged to make exploration in the remaining area of the KG Basin from these returns and any loss in exploration due to dry wells would also have to be factored in.
Salve said gas being a national resource cannot be traded purely for private profit and if sold at a lesser price than the government approved price, then not only the government"s share would be reduced but power consumers would also be at a disadvantage.