Sunday, August 16, 2009

TALE OF AMBANI BROTHERS: DIFFERENT VIEWS

Mr. Gurcharan Das views on the warring Ambani brothers over the pricing of gas lacks conviction on what is right and ethical.( Times of India 16-08-09) The elder brother, at the time of separation has agreed to supply the gas to his younger brother and to the NTPC at a specified rate. While agreeing to that rate at that time Mr. Mukesh must have made his home work and agreed to the price which is more than the cost price. If the terms of the agreement provides for revision of the prices even before the supply of one mmbtu, his company has every right to revise the prices. If not he should supply the gas at previously agreed price. Just because the current market price is higher than the agreed price the agreement can’t be breached. It is not about money but it is about business ethics, integrity, trasperency and trust. Satyam collapsed for not adhering to the above. Had Ambani brothers not separated I don’t think Mukesh would have taken the same decision of increase in prices to his group companies. By supplying gas at a lower rate, apart from his brother, the major beneficiaries are fertilizer producers and power plants who will pass on the benefits to the public at large.

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