Ambani withdraws $2B suit against New York Times

June 9, 2010 7:37:26 AM PDT
MUMBAI, India (AP) - Indian billionaire Anil Ambani has withdrawn a $2.1 billion defamation lawsuit against the New York Times and his estranged elder brother Mukesh, a spokesman said Wednesday. A Bombay High Court judge granted Anil's request to withdraw the 100 billion rupee ($2.1 billion) suit Tuesday, spokesman Gaurav Wahi confirmed, though he declined to say why Anil had decided to drop the litigation. Anil had not filed suit in the U.S.

Two Indian newspapers - DNA and Mint - which reproduced the 2008 article and the writer, Anand Giridharadas, were also among the respondents.

The dispute focused on two paragraphs of the 4,421-word article, in which Giridharadas wrote that Mukesh said Anil had run an "intelligence agency" of lobbyists and spies to keep tabs on bureaucrats and competitors.

Giridharadas, who is now pursuing a doctorate at Harvard, declined comment and Times lawyers did not respond immediately to a request for comment. A spokesman for Mukesh also declined to comment.

The move comes amid an apparent detente in a bitter five-year battle between India's richest brothers.

In late May, they declared a truce, saying they would scrap a contentious noncompete clause in a family agreement after the Supreme Court ordered them to renegotiate the terms of a gas sale deal also enshrined in the family memorandum, which divided their father's empire.

The Supreme Court decision put the future of Anil's gas broking firm, Reliance Natural Resources, in peril, as the family contract which guaranteed gas supply at below-market rates was its primary asset, analysts said at the time.

But scrapping the noncompete clause has freed Anil to do something he's long desired: Sell off part of his debt-laden Reliance Communications, India's second largest telecommunications company.

Mukesh blocked Anil's 2008 attempt to bring in an outside investor - South Africa's MTN Group - through a share swap, saying the noncompete clause gave him right of first refusal over Reliance Communications shares.

Reliance Communications is now courting bidders like Etisalat, AT&T and MTN Group to sell a 26 percent stake for some $4 billion, which is about twice its current market value.