Mukesh Ambani-led Reliance industry may face a big hurdle in its deal with Saudi Aramco after the Centre sought for the company to put a restraint on its asset sales, including its multi-billion deal.
The central government, in a petition filed with the Delhi High Court, has sought for a stay on Reliance Industry shedding 20 percent stakes to oil giant Saudi Aramco. After hearing the plea, the court has directed Reliance Industries Ltd (RIL) and British Gas (BG) to disclose their assets.
No payment from RIL and BG even after repeated notices: Government
As per a Times of India report, the Modi-led government sought restriction on the deal citing the failure of the two companies to honour their payment under a $4.5-billion international arbitral award in the Panna-Mukta and Tapti (PMT) production-sharing contracts.
The contract was signed way back in 1994 and has ended on Saturday. Even after multiple notices, the government is yet to receive any payments from these two companies. The government has sought the High court's intervention to direct the RIL and BG to secure $4.5 billion towards the arbitration award. The High court, in turn, has directed the RIL directors to file an affidavit disclosing the company's assets. Next hearing in the case will be held on February 6.
During the hearing, the centre argued, "RIL is in a massive group debt of Rs 2.88 trillion (Rs 2.88 lakh crore). It is in the process of selling, transferring, mortgaging, disposing of, alienating and creating third-party interest in the movable and immovable properties to cover its debt." It further reasoned that "RIL in future may also liquidate/sell its assets and properties" leaving nothing for the government to execute its arbitral award.
If the court rules against the Reliance industry, it would be a big blow for the company as Mukesh Ambani has planned to make it a debt-free company in the coming 18 months. Moving in the direction, Reliance agreed to sell 20 percent in the company to Saudi Aramco in a deal estimated to be worth $15 billion.
However, the RIL has argued that the partial award of dated 12.10.2016 arising out of Panna-Mukta and Tapti production sharing contract does not quantify any amount as being due to the government and since the parties included has already challenged the award in British High Court, there is no order which restrains RIL to carry out the transaction.
