LATEST UPDATE: RELIANCE EMPIRE SPLIT
Ambani feud: The mud flies thick and fast
And journalists wriggle delightedly in the
muck. The media has become a pimp in the Ambani versus Ambani feud. DWS finds nothing aesthetic about the skeletons tumbling out of the Reliance cupboard.
OUR NEWS EDTOR
A girl student of Delhi Public School (DPS) performed oral sex on her boyfriend from the same school, who filmed the operation with a camera phone, and forwarded the MMS clip to his friends, who in turn forwarded it to their friends. An IIT Kharagpur student who laid his hands on the clip put it on a CD and posted it for sale in Bazee.com. Several people bought. Baazee, when it came to know of the peddling pulled off the ad. Hawaldars got into the act and nabbed Baazee CEO Avnish Bajaj. I thought the whole episode was the most disgusting event of the year.
I was mistaken. The Prize for the most disgusting event of the year goes to the Ambani family feud, which ranks first for the muck-raker prize of the year. Nothing in the entire year evoked more disgust than the ongoings in the country's premier business family and how the Reliance group and its leaders have handled it.
When corporate houses peddle their stories, journalists are never surprised. In fact, they are even aware of the fact they are, more often than not, being used by the corporate houses, despite protestations of innocence and independence. That is okay. But even hard-boiled journalists are disgusted by the flood of "plants" from "sources close to one Ambani or the other." As one journalist friend remarked recently, there are enough plants in the Reliance split saga to grow a botanical garden.
Mukesh Ambani's initial 4-column newspaper advertisement, denying that he made any mention of ownership issues in Reliance family to CNBC was junked soon thereafter, with all the skeletons tumbling out one after the other. He had claimed that Dhirubhai had settled all ownership issues during his life-time. Really?
Never before have we seen responsible directors on company boards resigning during crisis times. At the very first itself, ML Bhakta, an old hand on the Reliance board resigned, fuelling intense speculation. Later, six members on Reliance Energy board resigned en masse, citing no reason! After a lot of avoidable drama, both Bhakta and the impulsive directors returned to their respective boards. What happened? We donít know, and we donít want to either. Soon, Amitabh Jhunjhunwaala resigned from Reliance Industries board. He was supposed to close to Anil Ambani.
"Plants" soon appeared in the media about the shareholding pattern of Reliance Industries and its ownership structure. Fingers were pointed into the dark unknown, where people were alleged to be hiding with Reliance stock. Since the nature of investment companies' Reliance stock holding was beyond the IQ of the humble voyeur journalist, nothing much came out in that direction. Thank God.
In early November and December, there was this allegation that there are financial improprieties in Reliance Infocomm, whereby the Reliance shareholder as short-changed so that Mukesh Ambani could keep a higher stake in RIM. The allegations and denials went on the media for quite some time, when finally Mukesh Ambani said he is cancelling the sweat equity in Reliance Infocomm allotted to him.
That did not douse the fire. The Reliance group stocks continued their free fall and the company announced a share buyback to please the market. It worked, and the share price went up. But surprise was waiting. On the day of the Reliance board meet to clear the buyback, Anil Ambani, who is vice-chairman and MD, announced to the media ahead of the meeting that the buyback is not the priority for the company- he suggested a bonus issue instead. Anil Ambani definitely knew that his suggestion would find its place in the dustbin - hence the eagerness to voice his opinion to the media. As expected, the board, with the exception of VC & MD Anil Ambani cleared the buyback. If Anil ever harboured any hope for any support at the Reliance board, the December 27 meeting would have erased it beyond repair.
Even as Anil wrote articles on spirituality and toured religious places, the "plants" continued. Economic Times quoted Anil Ambani, (from sources close to Anil) that "Mukesh sobbed all the way to the airport when I left him in US for his studies." We sob too. We sob at the shameless washing of all the Ambani linen in pubic. We could definitely do without all the sorry story.
Then started another campaign linking Anil Ambani to some Bollywood celebrities. Malicious is a light word to describe this. Media, the hungry voyeur put out whatever salacious crap they could lay their hands on.
In early January, Anil dropped another bombshell, resigning from the IPCL board where he was vice-chairman. He alleged that Anand Jain, a close associate of Mukesh is fuelling the division among the two brothers. He claimed that it was beneath his dignity to serve on the same board as Anand Jain. If this was a pressure tactic, it did not work. Anand Jain continues on IPCL board. Remember that this objection to Anand Jain bloomed all of a sudden: Jain has been on the IPCL board for a quite while.
Now comes up the allegation that promoters (read Mukesh) clubbed 4.7% of the RIL equity with that of the promoter group. That should have gone to Reliance shareholders, it was hinted. This too was furiously denied by the Mukesh Ambani camp. The mud-slinging continues. Media has gladly taken on the role of a pimp in the ping-pong game.
You spit lying on your back, the spit lands on your face. This is what the Ambanis (or sources close to them, if you like) are doing. For the Reliance shareholder and the general public, this is all combined dirty Ambani linen. If one of the brothers is shown up in poor light, it reflects equally badly on both. There is no winner or loser in this blame game. Everyone knows that the Ambani family jointly built the Reliance Empire from scratch. If its skeletons are dragged out now, the reaction would be: So? You both were part of it till yesterday!
Ambanis should learn from other family divisions in Indian corporate history and proceed with wisdom. Neeraj Bajaj wanted to split from Bajaj group, but there was no muck-raking there. In the bitter succession battle over the Priyamvada Birla will, Birlas went to court, but there was no mud-slinging, no "creative use" of media. There has been smooth succession in the Tata group several times in its 140 years of existence, even when there was no clear heir in sight. In the South, leading industrialists and publishers of Malayala Manorama, the Mammen Mappila family have survived as a close-knit unit through generations.
If the Ambanis can no longer work together, they should work towards a solution, instead of bringing out the tar brush. They can look for mediators, they can look for a legal division, they can seek help from family members, whatever. But the current course does not take them anywhere. Examples are many, where small business families successfully took on the challenge of transition when the patriarch passed away. It requires sagacity and a vision for the family's future. Which, I am sad to say, is lacking in the Reliance family now. So await more muck, more mud and more disgusting media plants.
OUR NEWS EDTOR