M a h a b h a r atain Polyester

The making of the world’s richest brothers and their feud

haMish McDonalD

1 Protean capitalist 1

2 a persuasive young bania 9

3 lessons from the souk 24

4 Catching live serpents 34

5 a first-class fountain 48

6 Guru of the equity cult 66

7 Friends in the right places 84

8 the great polyester war 101

9 the paper tiger 121

10 sleuths 145

11 letting loose a scorpion 159

Contents

12 business as usual 181

13 Murder medley 198

14 a political deluge 215

15 Under the reforms 232

16 housekeeping secrets 260

17 Dhirubhai’s dream 274

18 the polyester princes 298

19 Corporate Kurukshetra 312

20 Mother india 333

21 the ambanis apart 345

22 Goodbye, Gandhi 374

notes 389

index 397

acknowledgments vii

Glossary x

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1

Protean capitalist

In January 2007 a Bollywood movie had an unusual launch in three

corners of the globe. The full-length Hindi feature film, incorpo-

rating the usual song and dance sequences, was shown simultaneously

in Mumbai, Toronto and Sydney – thereby claiming to being in the

vanguard in the globalisation of Indian popular culture, although in

Sydney at least audiences were almost exclusively of Indian origin.

The ‘purely fictional’ film was titled Guru and told of the rise of one

Gurukant Desai, son of the local headmaster in the Gujarat village of

‘Idhar’. After a spell of trading spices in Istanbul, the ambitious young

Guru moves to the textile markets of Bombay, where he lives in a chawl

tenement with his new wife.

He battles to break into a closed trading circle controlled by an

aquiline-featured, wealthy young textile mill owner, prone to golfing in

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plus-fours and driving about in an open sports car. Intense, active and

always looking for loopholes to push through, Guru manages to build

up his company, Shakti Trading, diversifying into the manufacture of

polyester and raising his capital from adulatory shareholders, to whom

he delivers inspirational speeches at mass meetings held in a sports

stadium. He wins the friendship of newspaper baron Manikdas Gupta,

but the publisher becomes alarmed and insulted by Guru’s bribery of

his staff – from the peon’s polyester safari suit to the editor’s new car

– and sets Shyam Saxena, a bright young journalist of his newspaper

Swatantra, to expose him.

Posters summarised the film story as ‘Villager, Visionary, Winner’.

That the film was meant as more than just entertainment is clear from

the ‘foreword’ that Mani Ratnam wrote for the cover of the digital video

recording later put on sale:

If you are ambitious, if you have dreams, India is the place for you – today. But it wasn’t like this always. After independence we were a huge nation, a young nation, where abstinence was respectable, ambition was not, where society took precedence over the individual. Today we have moved from left of centre to the right. When did this happen? How did this happen? Or did it happen in front of us and we couldn’t see it? Guru is a revisiting of that time, of three decades during which India changed slowly but surely. And the mirror to that change is the life of one man – Gurukant Desai.

The film asserted, sometimes crudely, that Guru was a revolutionary

figure, representing a raw new India pushing against the constraints of

remnant colonial power structures and nostalgic doctrines. ‘I’ve worked

enough for the white man,’ says Guru when announcing his decision

to strike out in his own business. His dismissive rivals include Parsi

business leaders, dressed in the white robes and tall black hats normally

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worn at fire temples to make the point. ‘Neither you nor your khadi

army can stop me,’ Guru declares to newspaper baron Gupta, referring

to the home-spun cotton dress of his generation of freedom fighters

against British rule. There is a defiant address to supercilious judges

looking into the allegations raised by Gupta’s newspaper. He tells his

shareholders the establishment is against them all ‘because we are com-

moners, middle class’. One of the most contentious figures in contem-

porary India was being turned into celluloid myth.

Sixteen years earlier, the man being played by one of India’s hot-

test hearth-throb film stars, with music by the famous score-writer A.R.

Rahman, had dropped his name on our doorstep in New Delhi. In

January 1991 a messenger delivered a card, elaborately embossed with

a picture of the elephant-headed deity Ganesh, improbably carried on

the back of a much smaller mouse: Dhirubhai and Kokilaben Ambani

invited us to the wedding of their son Anil to Tina Munim in Bombay.

The young couple’s courtship had been a stormy one. The bride,

Tina Munim, was a girl with a past. A film starlet, Tina had had a

well-publicised affair with a much older actor before meeting Anil.

The groom was the tearaway one of the two Ambani boys. His parents

had frowned on the match. Bombay’s magnates usually tried to arrange

matches that cemented alliances with other powerful business or polit-

ical families. This one was not arranged, nor did it bring any more

than a certain popularity. Hired assailants had been sent with acid and

knives to scar Tina’s face, so went the gossip (apocryphal: Tina’s face

turned out to be flawless). Anil had threatened suicide if he could not

marry Tina, went another rumour. Finally the parents had agreed.

The father, Dhirubhai, was no less colourful and even more con-

troversial. Ambani had gone into polyester manufacturing in a big

way and got huge numbers of Indians to invest in shares of his com-

pany Reliance Industries. In India, the home of fine cotton textiles, it

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seemed that people couldn’t get enough polyester. The only constraint

on local producers like Reliance was the government’s licensing of their

capacity or where they built their factories. To increase his capacity,

Ambani had become a big political fixer. It was said his executives had

been shuttling briefcases of cash to politicians all over Delhi. There

had been epic battles, with the press baron Ramnath Goenka of the

Indian Express and with a textile rival from an old Parsi business house,

Nusli Wadia. A year or so earlier, a Reliance public relations manager

had been arrested for plotting to murder Wadia. The man had been

released, and nothing was moving in the case. Was it genuine or a

frame-up? Indian colleagues were not sure: no conspiracy was accepted

at face value.

✤

The wedding was going to be big, so big that it was to take place in

a football stadium, the same one where Dhirubhai Ambani had held

many of his shareholder meetings. But it began in an oddly casual way.

As instructed, in mid-afternoon we went to the Wodehouse Gym-

khana Club, some distance from the stadium. There we found guests

milling in the street outside, the men dressed mostly in lavishly cut

dark suits and showy ties, moustaches trimmed and hair brilliantined.

The women were heavily made up, laden with thick gold jewellery and

wearing lustrous gold-embroidered silk saris. Anil Ambani appeared

suddenly from the club grounds, dressed in a white satin outfit and

sequinned turban, sitting on a white horse. A brass band in white,

frogged tunics struck up a brash, repetitive march, and we set off in

separate phalanxes of men and women alongside the groom towards

the stadium. Every now and then, the process would pause while the

Indian guests broke into a provocative whirling dance, some holding

wads of money above their head. The stadium was transformed by tents,

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banks of marigolds and lights into a make-believe palace for 2000 of the

family’s closest friends and business contacts. They networked furiously

while a bare-chested Hindu pundit put Anil and Tina through hours of

Vedic marriage rites next to a smouldering sandalwood fire on a small

stage. Later, the guests descended on an elaborate buffet on tables that

took up an entire sideline of the football pitch, starting with all kinds

of samosas and other snacks, working through a selection of curries

and breads and finishing with fruits and sweets wrapped in gold leaf.

The next day the Ambanis put on the same spread – if not the wedding

ceremony – at another reception for 22 000 of their not-so-close friends,

employees and second-echelon contacts.

The lavishness was eclipsed by bigger displays of wealth in following

years, but at the time it was seen as a gesture that Dhirubhai Ambani

had made it through the political travails of the previous few years and

was unabashed – and certainly not strapped for either cash or friends.

At an interview a month later, Dhirubhai Ambani came limping

around a huge desk and sat down at a white leather sofa. Despite the

obvious effects of a stroke in a twisted right hand, his mahogany skin

was smooth and healthy, his hair plentiful and slicked back decisively

in a duck’s tail. His attention was unwavering. Disarmingly Dhirubhai

admitted to many of the youthful episodes that were the subject of

rumours and responded evenly to the criticisms commonly levelled

against him. He didn’t mind people calling him an ‘upstart’ or even

worse names. It just meant they were trapped in their complacency

while he was racing ahead. But the disputes were now ‘all history’ and

the former critics were now all his ‘good friends’ who bought their poly-

ester and raw materials from him.

‘The orbit goes on changing,’ he declared airily. ‘Nobody is a per-

manent friend, nobody is a permanent enemy. Everybody has his own

self-interest. Once you recognise that, everybody would be better off.’

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However, Ambani did point to an unfortunate trait in his coun-

trymen. ‘You must know that, in this country, people are very jealous.’ It

was not like in Hong Kong or other East Asian countries, where people

applauded each other’s success, he claimed. In India success was seen

as the prerogative of certain families. But he didn’t really mind. ‘Jeal-

ousy is a mark of respect,’ he said.

The Reliance public relations office continued to be attentive, sup-

plying advance notice of newsworthy events. But the company’s history

of political and corporate activity had put a sinister shadow across the

gleaming success. All through the government changes of 1990 and

1991, the press carried references to a certain ‘large industrial house’

supporting this or that party or being behind certain politicians. Scores

of party leaders, ex-ministers, senior bureaucrats and heads of the big

government-owned banks and corporations were said to be ‘Ambani

friends’ or ‘Ambani critics’. Mostly it was the friends, it seemed, who

got the jobs. At a meeting of shareholders in a big Bombay engineering

firm named Larsen & Toubro late in 1991, convened to approve a

takeover by the Ambanis, this undercurrent of hostility welled up into

a physical mêlée. In the shouting and jostling, the two Ambani sons

Mukesh and Anil had to flee the stage. The controversies kept con-

tinuing right through the 1990s.

Dhirubhai Ambani attracted adulation or distrust. To his millions

of investors, who had seen their share prices multiply, he was a busi-

ness messiah. To one writer, he was a ‘Frankenstein’s Monster’ created

by India’s experiments with close government control of the economy.

‘There are three Dhirubhai Ambanis,’ one of his fellow Gujaratis told

me. ‘One is unique, larger than life, a brand name. He is one of the

most talked-about industrialists, and for Gujarati people he has tre-

mendous emotional and sentimental appeal. He is their ultimate man

and has inspired many emulators. The second Dhirubhai Ambani is a

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schemer, a first-class liar who regrets nothing and has no values in life.

Then there is the third Dhirubhai Ambani, who has a more sophisti-

cated political brain, a dreamer and a visionary, almost Napoleonic.

People are always getting the three personalities mistaken.’

In a legal chamber lined with vellum-bound case references, a

senior lawyer took an equally stark view. ‘Today the fact is that Ambani

is bigger than government,’ said the lawyer in all seriousness. ‘He can

make or break prime ministers. In the United States you can build up

a super-corporation but the political system is still bigger than you. In

India the system is weak. If the stock exchange dares to expose Ambani,

he tells it: “I will pull my company shares out and make you collapse.

I am bigger than your exchange.” If the newspapers criticise, he can

point out they are dependent on his advertising and he has his jour-

nalists in every one of their departments. If the political parties take a

stand against him, he has his men in every party who can pull down

or embarrass the leaders. He is a threat to the system. Today he is

undefeatable.’

Phiroz Vakil, another senior advocate at the Mumbai bar, paused in

his tiny chambers in Bombay’s old Fort district, stuffing Erinmore Flake

tobacco into his pipe, before looking up intently and warning me that

people would suspect that writers asking for stories and opinions about

Ambani were being used as a stalking horse by the Ambanis themselves

to draw out information. For some others, favourable write-ups of the

Ambaris in the business media still rankled. ‘I suppose you think he’s a

hero,’ said the retired Finance Ministry official and Cabinet Secretary

Vinod Pande, down the phone.

Others just seemed too battle-weary. When I telephone the Orkay

Silk Mills chairman Kapal Mehra and asked to meet him, there was a

long pause. ‘I’m afraid that won’t be possible,’ Mehra said. The former

prime minister Viswanath Pratap Singh did not reply to a letter and

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giggled nervously when I cornered him at a cocktail party in New

Delhi. No, he could not possibly talk about any one company, Singh

said, easing away quickly into the crowd. Those who did agree to talk

for the most part insisted on anonymity: they had to live in India, they

explained.

Reliance and Dhirubhai Ambani meanwhile went on to greater

fame and fortune – and more controversies. After his death in 2002, the

subsequent split of the Reliance group between his sons and their con-

tinuing rivalry make the story of this man and his methods pertinent to

understanding the return of India to eminence in the world economy.