Mumbai, June 15: Sparks continue to fly between the Ambani brothers.

While Reliance Communications (R-Com) asserted that there could be no restriction on the transfer of listed shares of a listed company, elder brother Mukesh’s camp hit back by accusing the Anil Ambani group of “double standard and double speak”.

R-Com sources said the Union cabinet — based on an opinion by the attorney general of India and various Supreme Court decisions — had taken the view that any restriction on the free transfer of shares in an Indian public limited company, even if present in its articles of association, is illegal and unenforceable.

“On that basis, RIL’s claim is meaningless. Its position is even worse, as its alleged right of first refusal is not even incorporated in R-Com’s articles of association,” the sources said.

R-Com is referring to sub-section 5 of Section 111A of the Companies Act which says that there shall be no restriction on “the right of a holder of shares or debentures to transfer such shares or debentures, and any person acquiring such shares or debentures shall be entitled to voting rights unless the voting rights have been suspended by an order of the tribunal”.

However, the Mukesh Ambani group retaliated by charging the Anil camp of indulging in “double standard and double speak”.

RIL sources said even after receiving a legal written letter from it, both R-Com and MTN had not replied back. However, an RIL spokesperson declined to comment on the ongoing controversy between the two groups.

Sources close to RIL asserted that there was a first right of refusal and a non-compete clause applicable on both the parties, according to an agreement signed between the two.

They also accused the Anil Ambani group of citing the same agreement earlier against RIL, while disowning the first right of refusal now, thereby showing its “double standard”.

An R-Com statement said that RIL was evading the fact that the agreement of January 12, 2006, was illegally signed by RIL’s own officials when R-Com was still under Mukesh Ambani’s control. R-Com had rejected the agreement because of the illegal method followed by RIL.

This contention was questioned late in the evening by RCOM when in an official statement, it said that RIL ``is evading the issue that the alleged agreement on January 12, 2006 was illegally signed only by RIL's own officials, when RCOM was still under Mukesh Ambani's control. RIL is also evading the issue that ADA group had rejected the alleged agreement on 12th January 2006 itself, because of the illegal procedures followed by RIL''.

The sources added that RIL was ``falsely raising the bogey of litigation and damages for MTN'', while discussions are still ongoing. According to the official, till the framework for the potential combination is finalised, there is no basis for RIL to speculate that the alleged RoFR would be attracted to the proposed transaction.