NEW DELHI: As Anil Ambani moves closer to bagging MTN, Mukesh Ambani fired fresh. Reliance industries wrote directly to Reliance Communication, telling it to seek reconciliation or face formal arbitration proceedings.Earlier, Mukesh Ambani-led RIL shot off a missive that could block a possible USD 70 billion deal between Reliance Communications and South Africa's MTN, threatening to pursue its legal right on the firm run by younger brother Anil Ambani.

The second communication by RIL, after its first letter asserting right of first refusal on any stake sale, could cast a shadow on negotiations between MTN and RCOM, both of whom are seeking to extend the exclusivity agreement for talks for the deal.While RCOM dubbed the latest communication from RIL as "an expression of growing desperation and frustration", MTN spokesperson from Johannesburg declined to comment on the development and said that they would be able to comment on the extension of exclusivity agreement issue only after it expires.

"RIL has invoked the provisions of dispute resolution contained in the non-competition agreement dated January 12, 2006, and has invited RCOM to participate in the process of mutual conciliation prior to commencement of formal arbitration," an RIL spokesperson said. According to sources, a team of over half a dozen senior MTN officials, including legal experts, was in Mumbai in connection with the deal last week and left few days ago.

After RIL's first letter claiming right of first refusal on RCOM stake, the Anil Ambani group telecom firm is understood to be looking at a tie up with some global private equity and sovereign funds for acquiring a majority stake in MTN."A consortium led by Indian billionaire Anil Ambani is considering taking a majority stake in South African mobile operator MTN to help stave off a potential legal challenge from his elder brother, Mukesh Ambani, to the deal that has been under discussion," a report in Financial Times said.

The report quoted an unnamed person familiar with the deal that a special purpose vehicle controlled by Anil Ambani with co-investment from global private equity and Middle East sovereign wealth funds would own 51 per cent of MTN under the proposed new structure.Earlier reports had said that it could be MTN acquiring a majority stake in RCOM, which had triggered Reliance Industries' claim for RoFR and warnings of legal actions.

A possible amalgamation deal between RCOM and MTN, exclusive discussions for which started between the two parties late in May, could create a combined entity worth an estimated 70-80 billion dollars.According to the Financial Times report, the old structure had Anil Ambani and his co-investors planning to acquire a 40-45 per cent stake, against about 51 per cent being discussed now.