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Mukesh-Anil Ambani scrap 'non-compete' agreement of 2006 | In a significant development, Reliance Industries Ltd. (RIL) and Reliance ADA Group companies on Sunday formally agreed to cancel all existing non-compete arrangements which the two groups entered in January 2006. The two
groups have entered into a new simpler, non-compete agreement with respect to
only gas based power generation. The new agreement has been approved by the board
of directors of RIL and the respective Reliance ADA Group companies. Mukesh
Ambani-led
Reliance Industries Ltd. is mostly into old economy businesses that include refining,
gas and power while Anil Ambani's groups deal with new economy businesses like
finance, entertainment and telecom. The latest move means that RIL can now enter
into the financial services and telecom business while Reliance ADAG can enter
the refining business, an NDTV Profit report stated on Sunday. The cancellation
of the existing non-compete agreement offers enhanced operational and financial
flexibility to both groups, and greater ability to participate in high growth
sectors of the Indian economy, such as oil and gas, petrochemicals, telecommunications,
power, and financial services. However, RIL has agreed not to enter into Gas Based
Power Generation Business for the period upto March 31, 2022. An appropriate exception
has been made in respect of RIL’s captive gas based power plants. It is believed
that these developments will eliminate any room for further disputes between the
two groups, on matters relating to the scope and interpretation of the non-compete
obligations. |
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