The Anil Dhirubhai Ambani Group (ADAG) has urged the market regulator Securities & Exchange Board of India (Sebi) to probe the steep fall in the group’s firms since elder brother Mukesh Ambani-led Reliance Industries Ltd (RIL) raised the issue of the right of first refusal (RoFR). The RoFR threatens to stall the proposed deal between the South African telco MTN and the ADAG group’s flagship company Reliance Communication (RComm).

RComm has lost as much as 48.84% market cap since its discussions with MTN commenced in May for creating the world’s seventh largest telecom giant. According to sources, RComm has urged Sebi to probe any foul play on the part of RIL which has already sent legally worded letters to the various parties involved in the negotiations. When contacted, Sebi sources said the regulator had not received any letter from ADAG yet.

Sources close to RIL, on the other hand, said ADAG had not responded to RIL’s latest move to invite ADAG to participate in the process of mutual conciliation prior to the commencement of formal arbitration on the RoFR issue.

On Thursday, RIL sent a letter to ADAG, invoking the arbitration clause under the non-compete agreement with ADAG and inviting it to participate in the conciliation talks, prior to any such move.

However, RComm’s share surged 12.5 % at Rs 438.20 on Friday on the Bombay Stock Exchange, amid reports that the company would extend its negotiation with MTN by another 2 to 3 weeks.

ADAG has also claimed that RIL was ‘undermining’ Anil Ambani’s efforts to create a global telecom giant worth $70 billion with strong Indian roots by merging RComm and MTN. RComm is viewing the RIL move as deterrent not only to the 2 million RComm investors but also as a very damaging step as far as Indian business houses are being viewed globally, sources said.

RIL had earlier dashed off a letter to MTN and the various bankers involved in the deal, warning them of regulatory hurdles in entering into any equity dilution deal with RComm. It had claimed RoFR according to the agreement dated January 12, 2006, which the ADAG camp rubbished and warned of legal proceedings against RIL.

Though RComm maintained its stand of ongoing negotiations with MTN despite RIL’s move, RIL on Thursday dashed another letter invoking the arbitration clause.

With the 45-day exclusivity period of negotiations between MTN and RComm coming to an end on July 8, Reliance-watchers are expecting some sort of an announcement from the two sides. Some media reports have claimed that the two companies are expected to enter into another 2 to 3 weeks of exclusive talks.