Son of the Polyester Prince

Aditya Sinha
First Published : 09 Jan 2010 11:58:00 PM IST
Last Updated : 09 Jan 2010 01:43:28 AM IST

Reliance Industries Ltd chief Mukesh Ambani fascinates me. I spend time every day on twitter, where several well-known journalists often congratulate themselves for their stories of the day. Some stories are laudable, like the campaign for Ruchika, who was molested by a policeman and who then committed suicide. But never do these stories take on the really powerful like Mukesh Ambani or that other man who is not a top taxpayer but is the owner of a $100 million home, Lakshmi N Mittal. This is not to suggest one should take on RIL — one of the superpowers of Indian companies — just for the heck of it; but then, Mukesh Ambani and his company have been hovering behind the scenes a lot lately.

Near the year-end Newsweek carried an article, “Obama prepares to get tough on Iran”. It mentioned how in late 2008, RIL was discovered benefiting from US Exim bank guarantees to the tune of $900 million; this annoyed American legislators since RIL had for several years been doing business supplying refined petrol to Iran. Already that year the Obama administration had pressurised two French banks, BNP Paribas and Crédit Agricole, to cut their letters of credit to RIL for its Iran dealings. Now the US Congress threatened more. So RIL, Newsweek said, consulted with “its high-priced Washington lobbying firm, BGR”, and quietly passed word to members of Congress that it was halting all sales to Iran and insisting that its trading partners do the same.

Poor Mukesh. Forced to drop a lucrative customer by those American bullies whose policy, coincidentally, often appears driven by US oil majors (and the US military, which consumes $18 billion a year in oil, a sum greater than many GDPs). It wouldn’t be surprising if those oil majors (and the related Houston-based trading companies) look upon RIL as a Third World upstart.

Then on Monday RIL was in the news for raising Rs 2,675 crore through the sale of 25.85 million treasury shares. RIL’s stock listing, according to the financial papers, was at “an appropriate level”. It was a good deal for Mukesh who, according to the financials, is thinking of raising more cash by selling stock to institutional investors. Apparently, RIL needs to pay off debt which currently totals Rs 71,349 crore. Sinking wells at sea in the Krishna-Godavari basin is a terribly expensive business; companies lose hundreds of millions of dollars until they hit the right spot. To pay off the debt, RIL was even looking at equity-linked fund raising, and it is speculated that RIL could raise around Rs 36,000 crore.

As the week progressed, the news got better. On Wednesday, superstar of yesteryear and a courtier during Rajiv Gandhi’s premiership, Amitabh Bachchan, went to the movies with Gujarat Chief Minister Narendra Modi (or NaMo), where the two watched Paa and after which the Big B praised NaMo: “He does and acts as he speaks”. It was astounding considering that Bachchan’s wife Jaya is a Samajwadi Party MP; the SP is politically as distant from the BJP as you can get (it relies on a core Muslim and Yadav vote-base). The Big B could have kept his visit low-key but did not, and though he denied that he was looking for a future political role, you have to wonder. The only places his MP wife can go to are either the Congress or the BJP; but he and Congress chief Sonia Gandhi bitterly broke when Jaya joined SP and not the Congress as Sonia had wanted. So the Big B visited NaMo.

The same day, former SP general secretary Amar Singh called up from Dubai and said he was resigning all party posts. He blamed his health and it is true, both his kidneys are in poor shape and he was in Singapore recently for surgery. However, in politics no one retires hurt; in fact, no one retires, period. Amar Singh and his boss Mulayam Singh Yadav were falling out lately; and it was also obvious that Mulayam Singh, even if he lives to be as old and active as former Andhra Pradesh Governor N D Tiwari, is looking at a clean succession in his party so that his son takes over. With Amar Singh’s announcement, it is clear that Amar Singh’s nuisance value in Indian politics will reduce significantly. Yet that is not the whole story.

In the SP, Amar Singh led a “Page 3” gang that included Bachchan and Mukesh Ambani’s estranged brother Anil (a former SP MP). As you know, after their father’s death, Anil split the Reliance inheritance with his brother, and now they have been locked in a battle over the royalties from the gas from the KG basin, which Anil wants cheaply to use to fuel his power plants. In fact, Mukesh for a long time had an upper hand in the battle, until Anil unleashed a pretty effective PR campaign against RIL, to the extent that even Prime Minister Manmohan Singh had to intervene and ask the brothers to settle their pricing dispute amicably. People say that it had really shaken Mukesh up.

Until this week. Both the desertion by Bachchan and Amar Singh was proof, say those in the know, that Mulayam was not only clearing the succession in his party, but that he was also shifting some of his proverbial eggs from Anil’s basket. It was another masterly tactical move by Mukesh to undermine his brother’s political base (trouble is, the two brothers keep making masterly tactical moves against one another; this can only end in tears for them both).

So it was a satisfying week for Mukesh until Thursday night, when hooligans in Andhra Pradesh decided to vandalise some Reliance Fresh outlets. They were reacting to some wild rumour on a Russian tabloid’s website about a hypothesis on a conspiracy behind the death of former AP Chief Minister Y S R Reddy (who died in a helicopter crash in September). The CBI, which incidentally does not enjoy a sterling reputation and which was investigating the crash, did not find any hint of sabotage.

The suggestion of conspiracy in YSR’s death is ludicrous. However, you may recall that in 1987, a Reliance GM named K V Ambani was arrested and charged with conspiracy to murder Nusli Wadia, Dhirubhai Ambani’s commercial arch-foe (if you don’t you can read about it in The Polyester Prince by Hamish McDonald — no wait, you can’t, the book was mysteriously banned in India). At the very least, some semblance of muck-raking was in order. But RIL immediately denied the rumour; and our media went back to the other, smaller stories. It’s funny how the media persists with easy targets like ex-policemen (rightly so) but not with India’s oligarchs.

A week of ups and downs for Mukesh Ambani ended well. Power, intrigue, drama… And now you know why he fascinates me so.

editorchief@expressbuzz.com

About The Author;

Aditya Sinha is the Editor-in-Chief of ‘The New Indian Express’ and is based in Chennai