Fight for the Empire

Hamish McDonald’s awesome book, Ambani & Sons, talks at length about the tussle between Mukesh and Anil over the Reliance empire. Reliance always had a twisted maze of “holding companies” behind which the ownership of the flagship, Reliance Industries, was hidden. The reasons for this were many, including (1) Tax saving, and (2) Having options to make, er, certain kinds of moves.

 

The second reason, well, you can imagine what kinds of moves it would have enabled. It also allowed Dhirubhai to use those companies to ensure that the Reliance share price didn’t fall at times when traders were trying to hammer it down. Keeping the share price from falling also helped small investors...

 

But what has that got to do with the fight between the brothers? Aha, at one point, Dhirubhai had “asked Mukesh to reconfigure the entire network”. While he was at it, someone put an idea in Mukesh’s head:

“What if the new configuration could be effected to his advantage? What if he could control the empire? What if he could build a new matrix that his younger brother, Anil, could never understand and, hence, could never break up the group?”

The web had more than 350 shell companies! The seeds had been sown…

 

After Dhirubhai passed away, the two brothers would sometimes make announcements without consulting the other. Resentment started to grow on both sides. In June, 2004, Anil became a Rajya Sabha member with the support of the Samajwadi Party in UP:

“Mukesh was incandescent with anger at Anil’s jump into politics with an opposition party.”

Shortly thereafter, Mukesh sneaked in an annexure in a board meeting that declared himself the boss.

 

It turned out Dhirubhai had died intestate, i.e., without a will. Which left the question open: who now owned the 34% controlling stake in the corporate web? The tussle got increasingly bitter. Both sides would leak embarrassing information, and questionable actions of the other side to the media. But clearly Mukesh had the upper hand, and Anil knew it. So Anil played the emotional card:

“He was repeatedly and loudly surrendering the decision on what should be done (to their mother). Mukesh might have all the biggest cards in his hand, but could he resist the mother’s moral authority?”

 

Undoubtedly, there was naked power play on both sides. It is also almost certainly true that Anil was right when he accused the chamchas (sycophants), chelas (devotees) and cronies of “encouraging (Mukesh’s) estrangement from Anil to further their own influence”.

 

Human nature doesn’t change: the same basic emotions (greed, power, influence, perceived sense of right and wrong) have always been the drivers of conflicts…