1. Dhirubhai Ambani Biography
Born: December 28, 1932
Died: July 6, 2002
Achievements: Dhiru Bhai Ambani built India's largest private sector
company. Created an equity cult in the Indian capital market. Reliance is the
first Indian company to feature in forbes 500 list.
Dhirubhai Ambani was the most enterprising Indian entrepreneur. His
life journey is reminiscent of the rags to riches story. He is remembered as
the one who rewrote Indian corporate history and built a truly global
Dhirubhai Ambani alias Dhirajlal Hirachand Ambani was born on
December 28, 1932, at Chorwad, Gujarat, into a Modh family. His father
was a school teacher. Dhirubhai Ambani started his entrepreneurial career by
selling "bhajias" to pilgrims in Mount Girnar over the weekends.
After doing his matriculation at the age of 16, Dhirubhai moved to
Aden, Yemen. He worked there as a gas-station attendant, and as a clerk in
an oil company. He returned to India in 1958 with Rs 50,000 and set up a
Assisted by his two sons, Mukesh and Anil, Dhiru Bhai Ambani built
India's largest private sector company, Reliance India Limited, from a
2. scratch. Over time his business has diversified into a core specialisation in
petrochemicals with additional interests in telecommunications, information
technology, energy, power, retail, textiles, infrastructure service
infrastructure services, capital markets, and logistics.
Dhirubhai Ambani is credited with shaping India's equity culture, attracting
millions of retail investors in a market till then dominated by financial
institutions. Dhirubhai revolutionised capital markets. From nothing, he
generated billions of rupees in wealth for those who put their trust in his
companies. His efforts helped create an 'equity cult' in the Indian capital
market. With innovative instruments like the convertible debenture, Reliance
quickly became a favorite of the stock market in the 1980s.
In 1992, Reliance became the first Indian company to raise money in global
markets, its high credit-taking in international markets limited only by
India's sovereign rating. Reliance also became the first Indian company to
feature in Forbes 500 list.
Dhirubhai Ambani was named the Indian Entrepreneur of the 20th Century
by the Federation of Indian Chambers of Commerce and Industry (FICCI).
A poll conducted by The Times of India in 2000 voted him "greatest creator
of wealth in the century".
The Reliance Group founded by Dhirubhai is India’s largest business house
with total revenues of Rs. 80,000 crore (US $ 16.8 billion), cash profit of
over Rs. 9,800 crore, net profit of over Rs. 4,700 crore and exports of Rs.
3. 11,900 crore. The group’s activities span exploration of production of oil
and gas, refining and marketing, petrochemicals (polyester, polymers and
intermediates), textiles, financial services and insurance, power, telecom and
infocom initiatives. Reliance emerged as India’s "Most Admired Business
House" for the second successive year in a TNS-Mode survey for 2002.
Reliance Industries Limited (RIL) is India's largest private sector company
on all major financial parameters with gross turnover of Rs. 65,061 crore,
cash profit of Rs. 7,565 crore, net profit of Rs. 4,104 crore, net worth of Rs.
30,327 crore and total assets of Rs. 63,737 crore. RIL features in the Forbes
Global list of the world's 40 best big companies and in FT Global 500 list of
the world's largest companies.
RIL has emerged as the 'Best Managed Company' in a study by Business
Today and A. T. Kearney. RIL was named in the World's Most Respected
Companies list published by Financial Times based on a global survey and
research conducted by Price Waterhouse Copers. RIL also emerged as the
most respected among Indian companies and amongst the 10 most respected
energy and chemical companies in the world.
Credited with a number of financial innovations in the Indian capital
markets, the Reliance Group today has one of the largest family of
shareholders in the world. It is now India's leading textiles-petroleum-
petrochemicals-power-telecom player. And all this began in 1958 when
Dhirubhai Ambani started his first company, Reliance Commercial
Corporation, a commodity trading and export house.
4. THE DEATH OF AN ICON
The 6th of July 2002 was a black day in the Indian corporate history. The
Founder and Chairman of the Reliance group of Industries (Reliance),
Dhirajlal Hirachand Ambani (Dhirubhai) died after a 13 day battle for
survival. A perfect combination of entrepreneurship and leadership,
Dhirubhai transformed Reliance from a company with a turnover of Rs 640
million in 1976, to one with a turnover of Rs 620 billion in 2002.
Secret of success:
THE PASSING away of Dhirubhai Ambani, Chairman of the Reliance
group on July 6, signals the end of an era in Indian corporate history. For the
company, however, it raises some queries regarding the future of the group.
While there is no shortage of plaudits for the genius and financial acumen of
Dhirubhai Ambani, his two sons — Mukesh Ambani, Vice Chairman and
Managing Director, and Anil Ambani, Managing Director of Reliance —
have inherited the reins of a Rs. 65,000 crore empire.
The reasons why Dhirubhai Ambani is touted as having the equity cult in the
country are not far to seek. The company entered the capital market in 1977
with what was then a huge public issue of 28 lakh shares under the name of
Reliance Textile Industries. Thereafter, it has approached the market on
several occasions and the investing public have always responded heartily.
The stage was set in 1985 itself when the company's annual meeting was
held in the Cooperage grounds of Mumbai (a football stadium) and attended
by no less than 12,000 eager investors.
5. First to tap GDR market
Reliance was also the first Indian company to successfully tap the Global
Depository Receipt (GDR) market in 1992. It is also the only Indian
company to raise 50 and 100 year bonds in the U.S. debt markets. Thus, it
successfully raised cheaper funds overseas with lower borrowing costs to
repay higher cost Indian borrowings.
The company also successfully dabbled in the stock market; often creating
controversy and there is no shortage of accusations that it `managed' the
political environment and has often been seen to have influenced policy
In the years of the `Licence Raj' — industrial policy declarations made
periodically where public sector enterprises were given preference for
licences, example, availability of raw materials, foreign exchange and quotas
— a phenomenon that peaked in the late 1970s and the early 1980s but died
out in the 1990s, Ambani's skills were at their best. A senior industrialist,
when asked what differentiated Ambani from other businessmen, said,
"Everyone managed to get things done during that period; only Dhirubhai
managed it better.''
An interesting fact is that the Reliance group has seen its most phenomenal
growth in the last decade and a half; the period when Dhirubhai Ambani had
already suffered his first debilitating paralytic stroke. Recall that when he
suffered the stroke in 1986, the company's assets were a mere Rs. 1,000
crores. Then, it had three major projects going on stream — PTA (purified
6. terephthalic acid), PSF (polyester staple fibre) and LAB (linear alkyl
benzene) — all inputs for polyester — in Patalganga. The Hazira mega
complex was then only an aspiration.
The secret of the success post-1986 is buffeted by the transition of power
from the father to sons Mr. Mukesh Ambani and Mr. Anil Ambani with a
clear cut division of responsibility between the two under the supervision of
While one face of Reliance is its project implementation skills, the second is
the financial wizardry. The project implementation team is kept away from
all the happenings of the corporate team. The skills of the project team are
borne out by the fact that it was able to implement the mega projects at
Patalganga, Hazira and Jamnagar in record time.
The financial team has, over the years shifted from raising funds from
domestic equity investors to financial institutions and overseas investors.
Today, Reliance enjoys a high credit rating and has no problem convincing
institutional investors. The project implementation and finance teams are
considered worldclass and top of the line.
Today the Reliance group is the country's largest enterprise in the private
sector with revenues in excess of Rs. 60,000 crores, assets of Rs. 55,000
crores and a net profit in excess of Rs. 4,500 crores. Its sphere of activity
span petrochemicals — up and down the value chain — including synthetic
fibres, fibre intermediates, textiles and oil and gas. More recently, Reliance
entered financial services, power, insurance, telecom, biotechnology and
7. Foray into telecom
The recent diversifications are unrelated and that is where Reliance will have
to really pass the acid test. That the group does not lack financial muscle to
power its way into these areas is a given, but each of the new areas is as
unrelated to the other as it is huge. The telecom-infocom foray is a case in
point. The Reliance group has committing to invest more than Rs. 25,000
crores in this sector that is beset with competition.
Reliance has a 26 per cent stake in Reliance Telecom which provides
cellular services to over 3.50 lakh subscribers over 15 States. The group will
also be investing in building a broadband backbone, to connect 115 cities
with 60,000 kilometres of fibre. Reliance Infocom plans to have a national
footprint in telecom with a presence in fixed line, mobile, national and long
distance and international long distance telephony, data, image and value
added services. This, however, goes against the recent international trend of
choosing the more remunerative value-added services over building and
renting telecom infrastructure.
Then there are new areas such as insurance and biotechnology that needed to
be tackled. This is where the mettle of Mr. Mukesh Ambani and Mr. Anil
Ambani will be tested or not.
8. What do you call a man who hates to lose? A winner? That is too easy, too
glib, and buries the story. All Dhirajlal Hirachand Ambani ever wanted to be
is the biggest there ever is, the best there ever was. He wanted a piece of the
action -- preferably all of it. If others wouldn't let him in, he would create his
own turf and own it all.
And so the history of a corporate buccaneer will come to be written. If he
allows an epitaph, as he must -- the petrochemical complexes and refineries
that bear the name of Reliance will tell it better -- it could echo this line. A
line he almost spat at me once, triggered by a provocation about
competition: "Dekho," he snarled, "I'm not a loser."
So what is he really, this one-time cloth trader whose group now owns
textile manufacturing companies? A ragged marketeer for Shell in Aden
whose sons now oversee India's largest oil refinery in Jamnagar? A man who
ran from pillar to post, begging for a break, and whose representatives --
solely on account of business interest -- now part of an unofficial negotiating
team to Pakistan at the height of the Kargil war? A man who almost single-
handedly exploded the somnolent share bazaars into frenetic activity, using
it as a lever to gain funds and distribute wealth on an epic scale? Dekho, he
will tell you, as his sons will, we're not losers. Failure was never an option.
The effort has been so simple in its brilliance that it's mind-numbing nobody
thought of it before he did, the way he did. In a country where business
routinely took consumers for a ride, Dhirubhai was the first who said: come,
9. ride with me. We will get wealthy together, do you care what others say? So
a licence, which detractors said was out of turn, with superb project
management, has brought plants to manufacture textiles in Naroda, polyester
in Patalganga, petrochemicals in Hazira and a refinery on Gujarat's coast a
missile-hop away from Pakistan.The simple expedient of ensuring generous,
timely dividends to shareholders -- in 1985 Reliance offered the largest
dividend in the history of corporate India -- made investors feel part of his
It also ensured cheap stock-market funds on tap when corporate India was
weighed down by expensive bank borrowing. Dhirubhai redefined
economies of scale for modern India, integrating industries backward and
forward, bulldozing clearances, always growing, as many said, too fast for
his own good. He planned in such a way he wouldn't have to pay a rupee in
corporate taxes. He raised funds and reduced his debt burden with the
convertible debenture, rarely used until he did. And all the while, he would
smile and tell us: "I'm the bubble that burst."
India Inc, such as it was, had thrived for decades -- it still does -- on a
system of patronage, the cannibalistic politics-business nexus. Monopoly
controls were the lock, licences were the key and corporate India was in the
pocket of policymakers. Dhirubhai barged into that league, playing exactly
by the established, shadowy rules of the game. Only, he wouldn't toe the
line. He wanted the line to toe him. "I had the courage to defy the system,"
he said, "face persecution even."
For Dhirubhai, now 66, the end has always been as important as the means.
That is corporate skulduggery in black and white, and for which he has paid
10. a heavy price. Competition wanted to beat him down by destroying his
stock, his investors' stock and Reliance's credibility as a fund-raiser.
Dhirubhai ran an operation that bought Reliance shares for weeks, drove
prices sky-high and bankrupted more than one broker. But he could not then
and has not been able to now, dent arch rival Nusli Wadia's polyester
By brazenly getting projects through in a licence environment, he made
many enemies. One who almost brought him down was V.P. Singh. In the
mid-'80s when Singh the finance minister flew as high as Reliance, Singh
and Wadia won some wars. Dhirubhai has a debilitating stroke to show for
it, a battle scar that effectively announced that while two could play the
game, one has to lose; it also signalled his sons, Mukesh and Anil -- fiercely
protective of their father -- to take over.
Today, Reliance is India's third-largest group after Tata and A.V. Birla. Its
books are scrutinised in as fussy a place as Wall Street. When Mukesh and
Anil talk about "the PM" or "the President" it would be incorrect to presume
they are talking about our heads of state. When they go vacationing in
Switzerland or on safari in Africa, they must sometimes think of where they
come from, a one-room chawl in Mumbai. They must also think of the man
who made so much possible. And while they plot and plan and go about
their business, Reliance gets bigger.
11. The two faces of Dhirubhai Ambani
He achieved what almost everybody would consider impossible. In a life
spanning 69 years, he built from scratch India’s largest privately controlled
corporate empire. Dhirajlal Hirachand – better known as Dhirubhai –
Ambani would often say that success was his biggest enemy. He was a man
who aroused extreme responses in others. Either you loved him or you hated
him. There was just no way you could have been indifferent to this amazing
entrepreneur who thought big, acted tough, knew how to bend rules or have
rules bent for him. He was a visionary as well as a manipulator, a man who
communicated with the rich and the poor with equal felicity, who was
generous beyond the call of duty with those whom he liked and utterly
ruthless with his rivals – a man of many parts, of irreconcilable contrasts and
Dhirubhai Ambani expired on Saturday July 6, roughly ten minutes before
midnight, at Mumbai’s Breach Candy Hospital where he had been admitted
after he suffered a vascular stroke on the evening of June 24. This was his
second stroke – the first had occurred more than sixteen years earlier, in
February 1986, leaving the right side of his body paralyzed. At his
cremation, the well-heeled rubbed shoulders with the ordinary. No Indian
businessman ever attracted the kind of crowd that Dhirubhai did on his last
journey. After his cremation on the evening of Sunday July 7, his elder son
Mukesh reminded those gathered on the occasion that in 1957, when
12. Dhirubhai arrived in Mumbai from Aden in Yemen, he had only Rs 500 in
He was not exactly a pauper since Rs 500 meant much more than what the
amount means in this day and age. Nevertheless, one could not ask for a
more spectacular ‘rags-to-riches’ tale. The second son of a poorly paid
school-teacher from Chorwad village in Gujarat, he stopped studying after
the tenth standard and decided to join his elder brother, Ramniklal, who was
working in Aden at that time. (Not surprisingly, Dhirubhai ensured that his
two sons went to premier educational institutions in the US – Mukesh was
educated at Stanford University and Anil at the Wharton School of
The first job Dhirubhai held in Aden was that of an attendant in a gas
station. Half a century later, he would become chairman of a company that
owned the largest oil refinery in India and the fifth largest refinery in the
world, that is, Reliance Petroleum Limited which owns the refinery at
Jamnagar that has an annual capacity to refine up to 27 million tones of
When he died, the Reliance group of companies that Dhirubhai led had a
gross annual turnover in the region of Rs 75,000 crores or close to US $ 15
billion. The group’s interests include the manufacture of synthetic fibres,
textiles and petrochemical products, oil and gas exploration, petroleum
refining, besides telecommunications and financial services. In 1976-77, the
13. Reliance group had an annual turnover of Rs 70 crores. Fifteen years later,
this figure had jumped to Rs 3,000 crores. By the turn of the century, this
amount had skyrocketed to Rs 60,000 crores. In a period of 25 years, the
value of the Reliance group’s assets had jumped from Rs 33 crores to Rs
The textile tycoon’s meteoric rise was not without its fair share of
controversy. In India and in most countries of the world, there exists a close
nexus between business and politics. In the days of the license control raj
Dhirubhai, more than many of his fellow industrialists, understood and
appreciated the importance of ‘managing the environment’, a euphemism for
keeping politicians and bureaucrats happy. He made no secret of the fact that
he did not have an ego when it came to paying obeisance before government
officials – be they of the rank of secretary to the Government of India or a
Long before Dhirubhai entered the scene, Indian politicians were known to
curry favor with businessmen – licences and permits would be farmed out in
return for handsome donations during election campaigns. The crucial
difference in the business-politics nexus lay in the fact that by the time the
Reliance group’s fortunes were on the rise, the Indian economy had become
much more competitive. Hence, it was insufficient for those in power to
merely promote the interests of a particular business group; competitors had
14. to simultaneously be put down. This was precisely what happened to the
rivals of the Ambanis.
Who remembers Swan Mills? Or Kapal Mehra of Orkay? Even Nusli Wadia
of Bombay Dyeing is a pale shadow of what he would certainly have liked
to be. The undivided Goenka family that used to control the Indian Express
chain of newspapers – which carried on a campaign against the Reliance
group in 1986-87 – is currently divided into three factions. Whereas the
multi-edition newspaper has not entirely lost its feisty character, it is yet to
fulfill its late founder Ramnath Goenka’s cherished dream of becoming a
market leader in at least one of its many publishing centers.
A popular joke starts with a question: Which is the most powerful political
party in India? Answer: the Reliance Party of India. Others divide the
country’s politicians into two groups: a very large ‘R-positive’ group and a
very small ‘R-negative’ section. It is hardly a secret that Dhirubhai’s support
base would easily cut across political lines. Very few politicians have had
the gumption to oppose the Ambanis, just as the overwhelming majority of
journalists in the country preferred not to be critical of the Reliance group.
The Indian media, most of the time, has chosen to lap up whatever has been
doled out by the group’s public relations executives. The bureaucracy too
has, by and large, favored the Ambanis, not merely on account of the fact
that many babus have got accustomed to receiving expensive hampers on the
occasion of diwali.
15. While Dhirubhai did not have too many scruples when it came to currying
favor with politicians and bureaucrats, what cannot be denied is the fact that
perhaps no businessman in India attracted the kind of adulation he did. He
was more than just a legend in his lifetime. He successfully convinced close
to four million citizens, most of them belonging to the middle class, to invest
their hard-earned savings in Reliance group companies. He was fond of
describing Reliance shareholders as ‘family members’ and the group’s
annual general meetings acquired the atmosphere of large melas attended by
What cannot also be refuted is the fact that the Reliance group believed in
rewarding its shareholders handsomely. Much of the credit for the spread of
the so-called ‘equity cult’ in India in recent years should rightfully go to
Dhirubhai, even if the Reliance group was often accused of manipulating
share prices. Two group companies that once carried the cumbersome names
of Reliance Poly-Ethylene and Reliance Poly-Propylene – popularly called
Ilu and Pilu – went to the extent of blandly stating in the fine print of their
public issue prospectus documents that the value of the shares of the
companies had been increased though thin and circular trading. On another
occasion in January 1998, a functionary of Reliance Petroleum replied to a
show-cause notice served on the company by agreeing to shell out a sum of
Rs 25 crores to ‘buy peace’ with the income tax authorities.
16. When, after having spent eight years in Aden, Dhirubhai returned to
Mumbai, his lifestyle was akin to that of any ordinary lower middle class
Indian. In 1958, the year he started his first small trading venture, his family
used to reside in a one room apartment at Jaihind Estate in Bhuleshwar.
After trading in a range of products, primarily spices and fabrics, for eight
years, Dhirubhai achieved the first of the many goals he had set for himself
when he became the owner of a small spinning mill at Naroda, near
Ahmedabad. He did not look back.
He decided that unlike most Indian businessmen who borrowed heavily from
financial institutions to nurture their entrepreneurial ambitions, he would
instead raise money from the public at large to fund his industrial ventures.
In 1977, Reliance Industries went public and raised equity capital from tens
of thousands of investors, many of them located in small towns. From then
onwards, Dhirubhai started extensively promoting his company’s textile
brand name, Vimal. The story goes that on one particular day, the Reliance
group chairman inaugurated the retail outlets of as many as 100 franchises.
He had by then already succeeded in cultivating politicians. Indira Gandhi
returned to power in the 1980 general elections and Dhirubhai shared a
platform with the then prime minister of India at a victory rally. He had also
become very close to the then finance minister Pranab Mukherjee, not to
mention the prime minister’s principal aide R.K. Dhawan. He realised that it
was crucial to be friendly with politicians in power, especially at a time
17. when the group had embarked on an ambitious programme to build an
industrial complex at Patalganga to manufacture synthetic fibres and
intermediates for polyester production.
In 1982, Dhirubhai created waves in the stock markets when he took on a
Kolkata-based cartel of bear operators that had sought to hammer down the
share price of Reliance Industries. The cartel badly underestimated the
Ambani ability to fight back. Not only did Dhirubhai manage to ensure the
purchase of close to a million shares that the bear cartel offloaded, he
demand physical delivery of shares. The bear cartel was rattled. In the
process, the bourses were thrown into a state of turmoil and the Bombay
Stock Exchange had to shut down for a couple of days before the crisis was
The mid-eighties were a period during which the Reliance group got locked
in a bitter turf battle with Bombay Dyeing headed by Nusli Wadia. The two
corporate groups were producing competing products – Reliance was
manufacturing purified terephthalic acid (PTA) and Bombay Dyeing, di-
methyl terephthalate (DMT). Wadia lost the battle and reportedly became
the source of information for many of the articles against the Ambanis that
subsequently appeared in The Indian Express. In 1985, the Mumbai police
accused a general manager in a Reliance group company of conspiring to
kill Wadia, a charge that was never established in a court of law. Many years
later, a newspaper owned by the Ambanis would accuse Wadia of illegally
holding two passports and played up the fact that he was Mohammed Ali
18. 1986 was a crucial year for Dhirubhai. He suffered a stroke in February that
year. A few months later, the Express began publishing a series of articles
attacking the Reliance group as well as the Indira Gandhi regime for
favouring the Ambanis. These articles were coauthored by Arun Shourie
who, ironically, as Union Minister for Disinvestment in the Atal Behari
Vajpayee government, presided over the sale of 26 per cent of the equity
capital of the former public sector company, Indian Petrochemicals
Corporation Limited (IPCL), to the Reliance group in May this year. By
gaining managerial control over IPCL, the Reliance group would now be
able to dominate the Indian market for a wide variety of petrochemical
Shourie’s coauthor for the famous series of anti-Reliance articles was
Chennai-based chartered accountant S. Gurumurthy who happens to be a
leading light of the Swadeshi Jagaran Manch, an outfit that espouses the
cause of economic nationalism and is closely affiliated to the Rashtriya
Swayamsevak Sangh (RSS), the ideological parent of the ruling Bharatiya
Janata Party (BJP). The Express articles written by Shourie and Gurumurthy
meticulously detailed a host of ways in which the government of the day had
gone out of its way to assist the Ambanis. One article was on the subject of
how the Reliance group imported ‘spare parts’, ‘components’ and ‘balancing
equipment’ of textile manufacturing machinery to nearly double its
production capacities. The article provocatively claimed the Ambanis had
‘smuggled’ in a plant.
19. Another story detailed how companies registered in the tax haven, Isle of
Man, with ridiculous names like Crocodile Investments, Iota Investments
and Fiasco Investments had purchased Reliance shares at one-fifth their
market prices. Curiously, most of these firms were controlled by a clutch of
nonresident Indians who had the same surname, Shah. Though Pranab
Mukherjee had to change a reply he gave in Parliament on the investments
made by these firms, an inquiry conducted by the Reserve Bank of India
could not find any evidence of wrongdoing. Yet another article detailed how
the group had been the beneficiary of a ‘loan mela’ – a number of banks had
loaned funds to more than 50 firms that had all purchased debentures issued
by Reliance Industries.
Vishwanath Pratap Singh was one of the few politicians who took on the
Ambanis. In May 1985, as finance minister in Rajiv Gandhi’s government,
he suddenly shifted imports of PTA from the OGL (Open General Licence)
category. At that juncture, Reliance needed to import this product to
manufacture polyester filament yarn. It was found that the group had
‘persuaded’ a number of banks to open letters of credit that would allow it to
import almost one full year’s requirement of PTA on the eve of the issuance
of the government notification changing the category under which PTA
could be imported. It was hardly a coincidence that soon after V. P. Singh
fell out with Rajiv Gandhi, various tax agencies of the Indian government
raided the premises of the Express group.
20. Things got difficult for the Ambanis after V.P. Singh became prime minister
in December 1989. In 1990, government-owned financial institutions like
the Life Insurance Corporation and the General Insurance Corporation
stonewalled attempts by the Reliance group to acquire managerial control
over Larsen and Toubro, one of India’s largest construction and engineering
companies. Sensing defeat, the Ambanis resigned from the board of the
company after incurring large losses. Dhirubhai, who had become L&T
chairman in April 1989, had to quit his post to make way for D. N. Ghosh,
former chairman of the State Bank of India.
Once again, in an ironical twist of fate, more than eleven years later, the
Reliance group suddenly sold its stake in L&T to Grasim Industries headed
by Kumaramangalam Birla. This transaction too attracted adverse attention.
Questions were raised about how the Reliance group had increased its stake
in L&T a short while before the sale to Grasim had taken place. The
watchdog of the stock markets, the Securities and Exchange Board of India
(SEBI) instituted an inquiry into the transactions following allegations of
price manipulation and insider trading. Reliance had to later cough up a
token fine imposed by SEBI.
These are hardly the only controversies involving the Reliance group. Two
senior executives of the Reliance group, including one who was known to be
close to Dhirubhai, have been accused of violating the Official Secrets Act
after a Cabinet note was found in their office during a police raid. One of
21. these executives reportedly had links with a mafia don. Earlier, there had
been a major uproar in the stock exchanges over alleged cases of ‘switching’
of shares and the issue of duplicate shares. Some of these transactions
pertained to Dhirubhai’s personal physiotherapist.
More recently, last year, Raashid Alvi, a Member of Parliament belonging to
the Bahujan Samaj Party, levelled a large number of allegations against the
Reliance group. He distributed a voluminous bunch of photocopied
documents to journalists that included the letter in which a Reliance group
company had sought to ‘buy peace’ with the income tax department. The
MP accused the Reliance group companies of manipulating their balance
sheets and annual statements of account.
A week after Dhirubhai’s death, the Department of Company Affairs (DCA)
confirmed that there was basis to some of the allegations raised by Alvi and
that there were certain discrepancies in the balance sheet issued by Reliance
Petroleum seven years ago. A group spokesperson sought to dismiss the
discrepancy as a minor printing error that had been inadvertently committed.
The DCA subsequently confirmed that different Reliance group companies
had transferred interest income to one another in a questionable manner.
The plethora of scandals and controversies surrounding the Reliance group
left Dhirubhai’s supporters completely unmoved. His supporters – and there
was no dearth of them – would argue that there was no businessman in India
whose track record was lily-white. Had the textile tycoon himself not
22. acknowledged once to Time magazine that he was no Mother Teresa, they
would ask. Even Hamish McDonald’s unflattering portrayal of Dhirubhai in
his book The Polyester Prince – published in Australia by Allen and Unwin
and not available in India – acknowledges his remarkable entrepreneurial
talent that made him one of the few Indians on the Forbes list of the world’s
wealthy and placed Reliance among the leading 500 companies in the
developing world compiled by Fortune magazine.
Senior journalist T.V.R. Shenoy, in a tribute to Dhirubhai entitled ‘A
Superman named Ambani’ posted on the rediff.com website, points out that
the Reliance group accounts for three per cent of India’s gross domestic
product (GDP), five per cent of the country’s exports, 10 per cent of the
Indian government’s indirect tax revenues (excise and customs duties), 15
per cent of the weight of the sensitive index of the Bombay Stock Exchange
and 30 per cent of the total profits of all private companies in the country put
together. Another journalist, Manas Chakravarty, concluded his not-so-
adulatory article in the Business Standard with the following sentence: ‘…it
was (Dhirubhai’s) common touch combined with his uncommon vision that
was the secret of his success.’
Dhirubhai’s supporters like to recall instances of his ‘common touch’ and
his ability to interact with individuals from different walks of life. In 1983,
he had hosted a lunch for 12,000 of his company’s workers on the occasion
of the marriage of his younger daughter Dipti. The departed Reliance group
23. patriarch would often wonder aloud that if he could achieve what he did in a
lifetime, why could a thousand Dhirubhais not flourish. He was sure that
there were at least one thousand individuals like him in the country who
would dare to dream big. And if all these entrepreneurs could achieve their
ambitions, India would become an economic superpower one day, he would
Dhirubhai’s managerial skills were undoubtedly exceptional and he would
repose his faith in professionals, many of whom had earlier worked in much-
maligned public sector organisations. Whether it was the building of the
petroleum refinery at Jamnagar in three years at a capital cost that was 30
per cent lower than comparable projects, or the restarting of the Patalganga
plant in one month’s time after sudden floods had occurred in July 1989, the
Reliance management team displayed their competence on many occasions.
The Ambanis often scored because they stuck to their knitting or focused
sharply on their areas of ‘core competence’. The group flopped when they
entered new areas, be these the print medium or financial services. The
group’s foray into power generation too has so far not yielded significant
results. Dhirubhai’s sons, Mukesh (45) and Anil (43) are keen on effectively
implementing their plans of diversifying into the ‘new economy’, into new
areas like telecommunications, life sciences and insurance. The Reliance
group intends proving telecom services in many parts of the country and is
currently building an optic fibre based broadband internet network
24. connecting 115 cities. Only time will tell whether Mukesh and Anil prove to
be worthy successors to their father. But one thing seems certain: they will
try their level best not to be as controversial as Dhirubhai was.
Dhirubhai gave management a whole new 'ism'
February 03, 2006 06:06 IST
Dhirubhai Ambani was no ordinary leader. He was a man who gave
management a whole new "ism".
There is a new "ism" that I've been meaning to add to the vast world of
words for quite a while now. Because, without exaggeration, it's a word for
which no synonym can do full justice: "Dhirubhaism".
Inspired by the truly phenomenal Dhirubhai H Ambani, it denotes a
characteristic, tendency or syndrome as demonstrated by its inspirer.
Dhirubhai, on his part, had he been around, would have laughed heartily and
declared, "Small men like me don't inspire big words!"
There you have it - now that is a classic Dhirubhaism, the tendency to
disregard one's own invaluable contribution to society as significant.
I'm sure everyone who knew Dhirubhai well will have his or her own little
anecdote that illustrates his unique personality. He was a person whose heart
25. and head both worked at peak efficiency levels, all the time. And that
resulted in a truly unique and remarkable work philosophy, which is what I
would like to define as Dhirubhaism.
Let me explain this new "ism" with a few examples from my own
experiences of working with him.
Dhirubhaism No 1: Roll up your sleeves and help. You and your team
share the same DNA. Reliance, during Vimal's heady days had organized a
fashion show at the Convention Hall, at Ashoka Hotel in New Delhi.
As usual, every seat in the hall was taken, and there were an equal number of
impatient guests outside, waiting to be seated. I was of course completely
besieged, trying to handle the ensuing confusion, chaos and protests, when
to my amazement and relief, I saw Dhirubhai at the door trying to pacify the
Dhirubhai at that time was already a name to reckon with and a VIP himself,
but that did not stop him from rolling up his sleeves and diving in to rescue a
situation that had gone out of control. Most bosses in his place would have
driven up in their swank cars at the last moment and given the manager a
piece of their minds. Not Dhirubhai.
When things went wrong, he was the first person to sense that the
circumstances would have been beyond his team's control, rather than it
being a slip on their part, as he trusted their capabilities implicitly. His first
instinct was always to join his men in putting out the fire and not crucifying
26. them for it. Sounds too good a boss to be true, doesn't he? But then, that was
Dhirubhaism No 2: Be a safety net for your team. There used to be a time
when our agency Mudra was the target of some extremely vicious
propaganda by our peers, when on an almost daily basis my business ethics
were put on trial. I, on my part, putting on a brave front, never raised this
subject during any of my meetings with Dhirubhai.
But one day, during a particularly nasty spell, he gently asked me if I needed
any help in combating it. That did it. That was all the help that I needed.
Overwhelmed by his concern and compassion, I told him I could cope, but
the knowledge that he knew and cared for what I was going through, and
that he was there for me if I ever needed him, worked wonders for my
I went back a much taller man fully armed to face whatever came my way.
By letting us know that he was always aware of the trials we underwent and
that he was by our side through it all, he gave us the courage we never knew
Dhirubhaism No 3: The silent benefactor. This was another of his
remarkable traits. When he helped someone, he never ever breathed a word
about it to anyone else. There have been none among us who haven't known
his kindness, yet he never went around broadcasting it.
He never used charity as a platform to gain publicity. Sometimes, he would
27. even go to the extent of not letting the recipient know who the donor was.
Such was the extent of his generosity. "Expect the unexpected" just might
have been coined for him.
Dhirubhaism No 4: Dream big but dream with your eyes open. His
phenomenal achievement showed India that limitations were only in the
mind. And that nothing was truly unattainable for those who dreamed big.
Whenever I tried to point out to him that a task seemed too big to be
accomplished, he would reply: " No is no answer!" Not only did he dream
big, he taught all of us to do so too. His one-line brief to me when we began
Mudra was: "Make Vimal's advertising the benchmark for fashion
advertising in the country."
At that time, we were just a tiny, fledgling agency, tucked away in
Ahmedabad, struggling to put a team in place. When we presented the
seemingly insurmountable to him, his favourite response was always: "It's
difficult but not impossible!" And he was right. We did go on to achieve the
Both in its size and scope Vimal's fashion shows were unprecedented in the
country. Grand showroom openings, stunning experiments in print and
poster work all combined to give the brand a truly benchmark image. But
way back in 1980, no one would have believed it could have ever been
possible. Except Dhirubhai.
But though he dreamed big, he was able to clearly distinguish between
28. perception and reality and his favourite phrase "dream with your eyes open"
He never let preset norms govern his vision, yet he worked night and day
familiarizing himself with every little nitty-gritty that constituted his dreams
constantly sifting the wheat from the chaff. This is how, as he put it, even
though he dreamed, none of his dreams turned into nightmares. And this is
what gave him the courage to move from one orbit to the next despite
Dhirubhai was indeed a man of many parts, as is evident. I am sure there are
many people who display some of the traits mentioned above, in their
working styles as well, but Dhirubhai was one of those rare people who
demonstrated all of them, all the time.
And that's what made him such a phenomenal team builder and achiever.
Yes, we all need "Dhirubhaisms" in our lives to remind us that if it was
possible for one person to be all this and more, we too can. And like him, go
on to achieve the impossible too.