A Film Nagar source said that the reason behind the present situation dates back to the time Mohan Babu made the film 'Pedarayudu'. It seems that Rajnikanth gave 10 crore to Mohan Babu to make the film. The film went on to become a big hit and helped Mohan Babu to re-establish himself firmly as an actor in the industry.
But Mohan Babu did not repay the debt, says gossip. This did hurt Rajnikanth a lot. He felt this as an insult to their friendship. 10 crores is small sum for Rajnikanth. But what hurts him more was the way Mohan Babu conveniently 'forgotten' to repay him. Therefore, they are not very friendly anymore. But Rajni is silent to avoid any trouble from Mohan Babu as the latter is very open in his public speeches!!
The truth in this talk is not known but it is circling as a gossip.