All is well

by March 20, 2019 0 comments

All is well

With Mukesh Ambani bailing younger brother Anil out, can we put India’s most acrimonious family split behind us?

Dhirubhai Ambani built one of India’s largest private sector enterprises despite coming from an extremely humble background. He bequeathed his sons, Mukesh and Anil, an empire that spanned textiles to petrochemicals. Those who knew the brothers said that Mukesh always wanted to expand into consumer-facing businesses but was media-shy and an almost reticent individual though considered a shrewd businessman. It was the more media-savvy Anil Ambani who was the face of Reliance Industries Limited. He was the glamorous brother who featured on business magazine covers and had extensive ties with the world of Bollywood and in the corridors of power in New Delhi. On the face of it, both brothers had their own areas of expertise and complemented each other. But that did not hide the fact that there was a simmering sibling rivalry between the two and it was about to flare up in the pages of India’s business media. Given the massive size of Reliance’s operations and global linkages, the spat between the brothers in 2005 made headlines. Their mother Kokilaben brokered a truce and presided over a split. Mukesh kept the crown jewel of the business, the petrochemicals part, but had to cede control of the telecommunications arm that he had painstakingly built over the previous half-decade.

Even after the split, problems over the price of gas extracted from the Krishna-Godavari basin that Mukesh was to supply to Anil’s firms became a major legal battle. A huge perception battle on the same case was also fought in the pages of the media. Indeed, this was the “other” underlying issue in the infamous phone intercepts of public relations maven Nira Radia. Anil seemed to be determined to prove to the world that he could be as good a businessman as his brother and aggressively built up his telecommunications empire, buying up global data assets and launching a price war against incumbents like Bharti Airtel and Vodafone. While the 2G scam did not impact Reliance Communications directly, it did damage it while its ambitious over-expansion led to unpaid bills to vendors. This is what was to bring Anil Ambani crashing to the ground eventually with dues to Sweden’s Ericsson and a personal guarantee coming home to roost.

Did he need to go back and ask his brother for a desperate handout? After all, the sum of money did not seem that large for a person like Anil Ambani, especially with his name being brought up as a beneficiary of a supposed defence scam by Congress president Rahul Gandhi. However, it appears that things were bleaker for the younger brother than previously thought and Mukesh came to the rescue, a lost bonhomie between the brothers being restored during the weddings of the latter’s children. Possibly the shame of an Ambani potentially going to prison for unpaid dues, or worse, the shame of not helping his brother when he could have, motivated Mukesh. Whatever the reason, some believe that this bailout marks the end of the split and Anil’s part of Reliance Industries will be merged back into the mother company, closing one of corporate India’s messiest chapters. But that remains to be seen.

Writer & Courtesy: The Pioneer

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