When Dhirubhai Ambani was carving a niche for himself in the business world there used to be a strange relationship between the industrialists and Indian politics. Lately, that relationship has considerably weakened due to the strictness of the Election Commission and close watch by envigorated mass media. Then it was not so. The politicians needed funds for elections and industrialists required political patronage to survive in licence-permit regimes and restrictions. The two decades of seventies and eighties influenced those equations to a large extent. And that equation used to get warped up by a third factor. That factor consisted of well known journalists connected to print media mostly owned by business houses. In this book that factor could have been ignored or obfuscated with ambigous text, unspecific allusions, evasive remarks and cliches. But it would have been dishonest of us to our readers and injustice to the real character of Dhirubhai Ambani.
It was the period around 1980. Dhirubhai had realised that there was a peculiar relationship between politics and industry just as he had moved into the big league. An industrialist had to develop cordial relationship with political big-wigs. In that year Indira Gandhi had came back to power at centre after travails of post-emergency development. Dhirubhai had given his material support in raising a stage for the victory rally of Indira Gandhi. Dhirubhai had come very close to then finance minister, Pranab Mukherjee. But Dhirubhai had discovered that close relationships with politicians can bring him troubles in backlash. It was more problematic when an industrialist was in the middle of his important project. Then Dhirubhai was working hard to finish his most ambitious Patalganga project of setting up a complex to manufacture synthetic fibres and polyester. Dhirubhai was in a moral dilemma. He was afraid that his Patalganga project could be misconstrued as a reward for his close relationship with Indira Gandhi.
Similarly, in the middle of the decade of eighties his Reliance group had to face great difficulties in face of his business rivalry with Nusli Wadia of Bombay Dyeing House. Reliance was producing P.T.A. (Purified Terepethaline Acid) and Bombay Dyeing was making D.M.T. (Di-methyle Terepethelete). And Nusli Wadia had to face defeat in this business war. In retaliation ‘Indian Express’ printed a series of articles against Reliance Group. It openly alleged that Indira Gandhi was a patron of the Reliance Group and was gaining it advantages. The series writer Arun Shourie made sarcastic remarks when the Reliance Group aquired 26% shares of Indian Petrochemicals Corporation Limited (I.P.C.L.) and got the control over the management. As a result of this move Reliance gained control of various petrochemical products in the domestic market inspite of the barking of jealous dogs.
Arun Shourie had ganged up with Chennai based Chartered Accountant Gurumurti in campaign against Reliance Group. They got articles published in Indian Express’ claiming that Reliance Group had smuggled in machinery, components and balancing equipment for their textile production units which doubled their output. In this way an effort was made to show that Ambanis were involved in smuggling operations.
Similarly in 1985 Rajiv Gandhi became the Prime Minister and the charge of finance ministry was given to Vishwanath Pratap Singh. Suddenly V.P. Singh lifted import restrictions from P.T.A. products under Open General Licence category. At that time Reliance used to import that product to make Polyester Filament Yarn. Banks were also informed and instructed to provide loan facilities for imports of that product. It may not be a coincidence that V.P. Singh had to quit the Rajiv Gandhi cabinet. His departure was followed by raids on ‘Indian Express’ group premises by the India Taxation directorates. The people believed it was the fall out of close relations between Reliance and Rajiv Gandhi.
The things took turn for the worse when in December, 1989 V.P. Singh was sworn in as the new Prime Minister of India. The public sector financial institutions like Life Insurance Corporation and General Insurance Corporation had earlier helped Reliance Group to gain management control of the giant engineering undertaking like L&T (Larson and Tubro). With the becoming of the P.M. of V.P. Singh the Reliance got the wind that their control over the management of L&T was short lived. Then L & T was running at huge losses. Considering the precarious situation Dhirubhai Ambani tendered his resignation from the Chairmanship of Board of Directors of the Company. He had been appointed as the chairman in April, 1989. Dhirubhai had to hand over the charge to D.N. Ghosh ex-chairman of the State Bank of India.
Eleven year later Ambanis of Reliance group had to face adverse publicity on the same account. This time it was about sale of Reliance Group shares of L&T to Kumar Mangalam Birla of Grasim Industries. The deal also projected a negative image of Reliance Group in public. The question was raised how Reliance had increased its shares holding in L&T in such a short period? Then the shares were sold shortly later. SEBI and stock market controllers instituted an Inquiry Commission to probe that internal transfer/trade matter. Later SEBI fined the Reliance Group.
Till then only these two matters relating to Reliance had come to light. Then, in a police raid on the homes of two high executives of the Reliance Group cabinet notes related to official secrets were recovered. One of the two executives was a very close confidant of Dhirubhai Ambani. It was rumoured that the executive had links with underworld. Before that Dhirubhai’s name was dragged in the matters of unusual rises and falls in share market indices, trading in shares and duplicate shares issues.
One year later, Rashid Alvi (M.P.) levelled serious charges against Reliance Group. Then, he was in the B.S.P. (Bahujan Samaj Party). Later he joined Congress. He distributed photocopies of some sensational documents in large numbers to media people. Amongst those was a letter according to which Reliance Group had ‘bought peace’ with Income Tax department. He also alleged that Reliance Group had presented its Balance Sheet and Annual Accounts in a bogus manner. One week later Department of Company Affairs came out with a statement that there was some truth in Rashid Alvi’s allegations in respect of a Balance Sheet submitted seven years ago. A spokes person of Reliance Group admitted that it was a printing error. D.C.A. also remarked that there were discrepencies in interest calculations of internal accounts of Reliance Group’s companies. The method of calculations and account keeping was questioned.
But inspite of all the controversies and calumny the admirers and faithfuls of Dhirubhai did not lose trust in him. Ambani Group retained the faith of its workers and shareholders. His supporters stayed with him and cheered him on in his forward march. Ignoring the rumours they said Dhirubhai was a man of character and conscience the corporate world had not seen before. Textile king Dhirubhai once in an interview to ‘Times’ magazine said that detractors were bound to speak in negative terms about him since he was no Mother Teresa. Hamish MacDonald wrote a book on Dhirubhai titled The Polyester Prince (Printed in Australia) and praised him in lavish terms for his unprecedented enterprise and business accumen. He figured in 500 International Top Companies list of Forbes magazine along with a few other Indians. Reliance was listed in developing countries’ list of top 500 companies which was recognition of Dhirubhai’s extraordinary business talent. ‘Fortune’ magazine accepted the fact that Reliance Group was a power in the economic world.
Veteran Journalist T.V.R. Shenoy paid his tributes to Dhirubhai Ambani on his ‘Dhirubhai : A Superman’ Website revealing that due to Dhirubhai’s stellar role his enterprises contributed 3% in GDP, 5% in exports, 10% in Custom and Excise collections of the country and 30% in the profits of Bombay Stock Exchange. These figures clearly spoke of the success of Dhirubhai Ambani which leaves nothing more to prove.
Another economic commentator, Manas Chakraverti wrote in ‘Business Standard’—”Dhirubhai’s Midas touch and extraordinary thinking should be accepted as the root mantra of his success.”
All said and done, like every successful man Dhirubhai also had to face criticisims and unkind remarks of detractors. When a person of a humble background rises to touch the sky, the people already up there normally do not accept the new entry. The law of nature is that all the persons can’t achieve equal success. Some are very successful whereas others fall behind. It generates jealousy and ill will starting accusations and counter accusations. The narrow-minded people try to sling mud on the man successful and achiever. Unfortunately Dhirubhai Ambani suffered the same fate. The business rivals accused him of adopting wrong and unethical business tactics. That is the way of the world.
We must remember that an industrialists’s links with politicians is always viewed with suspicion. But in a democracy everyone has the fundamental right to have relationships with politicians of his choice. The relationship between an industrialist and a politician is like entering a chamber of soot where getting some black spots on is unavoidable. And then there is media which can easily be influenced by the rivals. If a particular media group does not support a particular ideology then it starts to paint everyone supporting that ideology with black brush. The businessmen or industrialists falling in that category become easy targets. All the accusations levelled on Dhirubhai Ambani should be viewed in this light.
It is our responsibility to draw a dividing line between characters like Dhirubhai Ambani and Haji Mastan. The moralities, supporters and opponents of politics are not permanent. Similarly the business would can not be an ass of consistency. According to the changing economic philosophy and policies of the country an industrialists must work out his strategy correspondingly. That is what Dhirubhai did. The only difference was that compared to his contemporary industrialists to he made smarter and faster moves to emerge winner. We must remember that Dhirubhai was not born with a silver spoon in his mouth. He was only a little treasure of a poor teacher. On his own he grew up to become a star of Indian economic miracle. It is also true that those rivals who had been much vocal critics of Dhirubhai in his life time today admit their misjudgement. Hence Dhirubhai’s capability, business accumen and industriousness can no more be questioned.
