Published on

Published in: Business, Economy & Finance
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide


  1. 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 corporate group. 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 textiletrading company. Assisted by his two sons, Mukesh and Anil, Dhiru Bhai Ambani built India's largest private sector company, Reliance India Limited, from a
  2. 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. 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. 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. 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 making. 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.'' Phenomenal growth 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. 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 Dhirubhai Ambani. 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 infocom.
  7. 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. 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. 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 success. 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. 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 empire. 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. 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 paradoxes galore. 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. 12. Dhirubhai arrived in Mumbai from Aden in Yemen, he had only Rs 500 in his pocket. 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 Business.) 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 crude oil. 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. 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 30,000 crores. 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 lowly peon. 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. 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. 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 hordes. 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. 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. 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 resolved. 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 Jinnah’s grandson.
  18. 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 products. 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. 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. 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. 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. 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 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. 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 remark. 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. 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. 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 guests. 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. 26. them for it. Sounds too good a boss to be true, doesn't he? But then, that was Dhirubhai. 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 confidence. 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 we had. 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. 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 impossible. 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. 28. perception and reality and his favourite phrase "dream with your eyes open" underlined this. 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 tremendous odds. 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.