Robin Hood + Maradona = Dhirubhai Ambani

Most of Hamish McDonald’s awesome book, Ambani & Sons, is about Dhirubhai. One thing I realized from the book is that the backdrop to how things were in India back then cannot be separated from Dhirubhai’s actions. Thus:

“Dhirubhai had learnt that relationships were the key to unlocking help and that the law could be argued with.”

If connections were king, this attribute probably helped him immensely:

“Dhirubhai was endowed with a photographic memory for faces and names, and he would try to turn any contact – however fleeting – into a common background on which some affection could be based.”

So good was Dhirubhai at this that Arun Shorie wrote (decades later):

“He had sources in places where mere journalists like me do not even know there are places.”

 

It was a time when, as McDonald writes:

“A lot of grovelling indeed was required for businessmen to get the clearances they needed.”

And Dhirubhai was willing to do whatever was needed:

“I am willing to salaam anyone. One thing you won’t find in me and that is ego.”

 

When Indira Gandhi nationalized the banks (i.e., the government took over the banks), her stated intent was to direct bank loans to agriculturalists, small entrepreneurs, and business newcomers. Instead:

“(Takeover by government led to) lending directed by political connections rather than commercial viability.”

Well, Reliance always needed loans to grow, ergo….

 

As the government controlled every aspect of economic life, it came to be, in the words of a senior non-Congress politician of 1996, that:

“(Dhirubhai transitioned) from supplicant – the most abject kind of supplicant - to influencer and then to controller of Indian politics.”

S. Gurumurthy wrote in Indian Express how laws were subverted:

“If the main rule prohibits something, get a sub-rule added which permits it… Businesses thrive on such rules. Touts make their fortune, politicians enhance their power and bureaucrats their importance. Rule of law at once becomes sub-rule of law and sub-rule eventually becomes subversive rule.”

If that was how the game was played, well, Dhirubhai became a better player at the game than most.

 

In any case, long before Dhirubhai:

“In many parts of India, government jobs have long been allotted by auction.”

Did any businessman have any real choice then?

“Dhirubhai was active in the lobbying when the top posts fell vacant in the banks, insurance companies and statutory authorities.”

 

His textile/Vimal business gave him a weapon in PR (Public Relations):

“The huge advertising expenditure of Reliance gave an automatic hold over many of the less established newspapers and magazines.”

 

And with such power and influence came other benefits. For example:

“Reliance became the most famous of India’s ‘zero-tax’ companies (all the way until 1996)… Constant expansion and heavy borrowing gave ever-increasing cost deductions to offset against profits.”

Given how few people paid any tax in that era, the general reaction was apathy:

“The only victims, it seemed, were the government, which did not get as much tax revenue out of Reliance as perhaps it should, and the bureaucrats, who could not get their vindictive pleasure our of blocking or crippling private sector endeavour or rents from permitting it.”

 

But it seems Dhirubhai had one line that he wouldn’t cross - murder:

“Ambani was above this vicious jungle. His chosen weapons were the robust publicity offensive, the judicious stimulus to bureaucrats and politician, and an unfailing ability to interest big and smaller investors in their schemes.”

 

And he got the public on his side because millions of his shareholders were middle-class Indians. Which in turn created other benefits:

“It was evidence of a popular following that made many politicians… think twice before denying him anything.”

When Dhirubhai passed away, Harish Nambiar wrote:

“Ambani made a huge base of small investors partake of his profits. In that respect he was a Robin Hood to Indian investors, he may not be the most moral, or even legitimate businessman, but he was generous to his hordes… Ambani may have broken all the laws of the land, manipulated all the politicians and priced each and every influential man in power to reach where he did. But much like Maradona’s hand of God goal, eventually… Indians will remember him and his company as the eventual winner and Reliance shareholders will revere him as their deliverer.”

 

As McDonald wrote:

“The ‘dark’ side of Dhirubhai was part of his attraction. It was a thumb in the nose at the bureaucrats, the corrupt politicians...”

Say what you wish about the man, but it is undeniable that:

“Dhirubhai was never simply an industrialist, a trader, a financial juggler or a political manipulator, but all four in one.”