Story of Ambani Brothers: A Tale of Business, Politics, and Family Feuds
In 2008, Anil Ambani was ranked as the 6th richest man in the world with a staggering fortune of $42 billion—surpassing even his brother, Mukesh Ambani. However, fast forward 16 years, and Anil finds himself ensnared in debt, court cases, and a five-year ban from the Indian market by SEBI (Securities and Exchange Board of India). How did such a dramatic downfall happen to someone from the prestigious Ambani family? The root cause lies in a battle between two brothers, Mukesh and Anil, a battle that shaped India's political and financial landscape.
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| Story of Ambani brothers |
Root of Ambani business which is started by Dhirubhai
Dhirubhai comes gujrati family and they started their journey from Mumbai from a fuel station attendant. And now Reliance industry is in front of us as a legendary. so lets enjoy the story till end.
The Legacy of Dhirubhai Ambani
The story of the Ambani brothers begins with their father, Dhirubhai Ambani. Dhirubhai, once a gas station attendant, rose to become one of India's most influential businessmen by the 1980s. His entrepreneurial success laid the foundation for what would become Reliance Industries, a behemoth in the Indian business world.In February 1986, Dhirubhai suffered a stroke that paralyzed his right hand, prompting him to begin involving his sons, Mukesh and Anil, in the family business. Mukesh, an introvert by nature, took on the operational side, managing mega projects with precision. In contrast, Anil, more extroverted, became the public face of Reliance, handling public relations, corporate affairs, lobbying, and marketing.
By 1991, Dhirubhai made a decisive move, appointing Mukesh as Vice Chairman of Reliance, while Anil remained the Joint Managing Director. This appointment was a clear signal of Dhirubhai's preference for Mukesh to take the reins of the company. Mukesh quickly expanded his influence within the company, surrounding himself with trusted allies like Anand Jain and Manoj Modi.
Personal Choices and Family Tensions
Family dynamics also played a significant role in Dhirubhai's preference for Mukesh. One pivotal reason was Anil's decision to marry Tina Munim, a glamorous actress and former Miss India. Tina was seen as a modern and unconventional figure, known for her bold lifestyle and a prior relationship with actor Rajesh Khanna. The conservative Ambani family, especially Dhirubhai, opposed the marriage. In fact, Dhirubhai allegedly used his political clout to have the Enforcement Directorate (ED) raid Tina’s residence, an event confirmed by multiple sources, including the book Gas Wars.Despite these obstacles, Anil insisted on marrying Tina and threatened to leave the family if his father did not accept her. Ultimately, family members intervened, and in February 1991, Anil and Tina got married. However, this tension left a lasting mark on the family. Tina was never fully accepted by Dhirubhai or his wife, Kokila Ben, who instead embraced Mukesh’s wife, Neeta Dalal. Neeta, who came from a more traditional background, had been chosen by Kokila Ben herself, further cementing her place in the family.
Cracks in the Foundation of Reliance
By the late 1990s, clear divisions began to form within Reliance. While Mukesh steadily increased his influence and formed a tight-knit circle of loyalists, Anil felt increasingly sidelined. Mukesh’s growing control became evident when Reliance entered the telecom sector with the creation of Reliance Infocom. Anil, despite being a key player in corporate affairs and managing relationships with politicians and bureaucrats, was not given any significant role in the telecom venture. Reliance Infocom was primarily controlled by Mukesh and Neeta, further alienating Anil.By 1999, the division between the two brothers was well-known within the company. Dhirubhai, aware of the growing tensions, tried to unite his sons by merging Reliance India Ltd with Reliance Petroleum in March 2002, hoping that the complexity of the merged entity would force Mukesh and Anil to work together. Unfortunately, his plan did not succeed.
Dhirubhai’s Passing and Power Struggles
On July 6, 2002, Dhirubhai Ambani passed away, leaving Mukesh in control of Reliance, while Anil became the second-in-command. But tensions between the brothers only grew after their father’s death. Anil accused Mukesh of using Reliance's resources to finance his telecom ambitions, and he also took issue with Neeta Ambani’s expanding role in Reliance Infocom, where she managed advertising and branding efforts.In July 2004, matters escalated when the Reliance Board reduced Anil’s financial powers, giving full control to Mukesh. Anil interpreted this as an attempt to completely sideline him. He had hoped that their mother, Kokila Ben, would take over as the Chairman after Dhirubhai's death, but Mukesh opposed this, fearing that it would send the wrong message to international investors.
Political Ties and Personal Ambitions
While Mukesh focused on expanding Reliance’s business, Anil had begun to forge close ties with Indian politicians, particularly Mulayam Singh Yadav and Amar Singh of the Socialist Party. This political alignment caused discomfort for Mukesh, who believed that Anil’s association with a major opposition party would hurt Reliance's interests under the Congress-led government. Anil’s entry into politics, culminating in his election to the Rajya Sabha in June 2004 with the support of the Socialist Party, only deepened the rift between the brothers.Mukesh was also unhappy with Anil's power generation project in Uttar Pradesh, which Anil announced would be fueled by gas from the Krishna Godavari Basin. Mukesh saw this project as another move by Anil to curry favor with his political allies, rather than a sound business decision.
By late 2004, the once-strong relationship between Mukesh and Anil had deteriorated to a breaking point. Reports began to surface about a widening gap between the two brothers, leading to public speculation about a possible split in the Reliance empire.
The Turning Point: The Split Between the Ambani Brothers
On 18th November 2004, two key events reshaped the Ambani family dynamics. During a business seminar hosted by CNBC TV18, attended by prominent business figures, Mukesh Ambani made an appearance, as did Steve Ballmer, then CEO of Microsoft. Interestingly, Ballmer, a former classmate of Mukesh from Stanford Business School, revealed that both he and Mukesh had dropped out in their first year. This revelation came as a shock to the audience, particularly since Reliance's official documents had long suggested that Mukesh had completed his MBA.Upset by this disclosure, Mukesh Ambani soon left the seminar, but not before making another surprising statement—he hinted at ownership issues within Reliance, though he noted that these concerns were private. At this point, the rivalry between Mukesh and his brother Anil Ambani had not yet become public, making Mukesh’s comment all the more unexpected.
The Emergence of Public Conflict
In the weeks that followed, the conflict between the brothers spilled into the media, with Anil Ambani seeming to have the upper hand. Allegations emerged against Mukesh, including claims about his corporate governance practices, alleged political ties, and supposed use of Reliance resources for personal gain. These reports severely damaged Mukesh’s public image, culminating in a full-blown media war. By the end of 2004, the situation had worsened to the point that prominent figures like Finance Minister P. Chidambaram, Prime Minister Manmohan Singh, and even Mukesh’s mother, Kokilaben Ambani, intervened.With mounting pressure from all sides, including K.V. Kamath, the chairman of ICICI Bank and a family friend, Mukesh finally agreed to a compromise. In June 2005, the Ambani brothers signed a formal split agreement, delineating the division of Reliance’s assets. Mukesh would retain control of Reliance Industries Ltd. (RIL) and Indian Petrochemicals Corporation Ltd., while Anil would receive control of Reliance Infocom, Reliance Energy, and Reliance Capital.
The Division of Assets and the Non-Compete Agreement
The agreement not only split Reliance’s assets, with Mukesh receiving 60-70% and Anil getting 30-40%, but also included a non-compete clause. Under this clause, the brothers agreed that neither would enter industries in which the other already had a presence, for at least 10 years. Despite the division, both brothers saw significant financial success in the years that followed. By 2007, Anil Ambani’s net worth had tripled to $45 billion, while Mukesh’s had risen to $49 billion, putting them in close competition.Mukesh’s Discontent and the Reliance Power IPO Fiasco
Despite the agreement, Mukesh harbored discontent, particularly over the loss of Reliance Infocom, which had been his dream project. He waited for the right moment to strike back, which came in 2008, when Anil launched the highly anticipated Reliance Power IPO, the largest IPO in India’s history at the time.The IPO saw unprecedented demand on its first day, but things took a sharp turn the next day as the stock plummeted. Anil accused Mukesh’s companies of orchestrating this downfall, alleging that entities linked to Mukesh had dumped shares, causing the price to collapse. This marked a severe blow to Anil’s ambitions, further fueling the rivalry.
The MTN Deal and Mukesh’s Legal Maneuvering
Soon after, Anil sought to strike a game-changing deal by merging his Reliance Communications with South Africa’s MTN. If successful, Anil would have surpassed Mukesh in wealth. However, Mukesh invoked the right of first refusal clause in their earlier agreement, effectively blocking the deal. When Anil tried to bypass this by acquiring MTN shares directly, the South African company withdrew from the deal, wary of the brothers’ ongoing conflict. This further deepened Anil’s frustration, as he believed that Mukesh was using political influence to undermine him at every step.Political Interference and Allegations of Sabotage
Anil’s companies faced additional setbacks, including losing bids for airport contracts and coal-based methane extraction contracts, decisions that Anil attributed to Mukesh’s influence over the government. As tensions escalated, Anil publicly accused Mukesh of using political connections to harm his business interests.The Gas Wars Begin
The most significant conflict between the brothers revolved around the gas business. Under the terms of the 2005 agreement, Mukesh retained control of gas exploration and extraction, while Anil was responsible for power generation. Anil needed gas to fuel his power plant in Dadri, Uttar Pradesh, and Mukesh had initially agreed to supply it at a price of $2.34 per million British thermal units (BTUs).However, the situation became contentious when Mukesh’s company sought approval from the Ministry of Petroleum and Natural Gas to increase the gas price, which Anil saw as an attempt to sabotage his power project. The ministry, then led by Murli Deora, a politician close to Dhirubhai, refused to approve the agreed-upon price. Anil alleged that this was done to benefit Mukesh, sparking a fierce legal battle that eventually involved the government.
By 2007, a government committee headed by Pranab Mukherjee approved a new price of $4.21 per million BTUs, nearly double the price Anil had expected. This led Anil to file a lawsuit, and in 2009, the Bombay High Court ruled in Anil’s favor, mandating that Mukesh honor the family agreement.
The Government Steps In
However, Mukesh’s company quickly appealed the decision to the Supreme Court, and just before the case was heard, the Indian government intervened. It declared that natural gas is a national asset and that the brothers could not independently determine its price. This intervention further complicated matters, as Anil accused the UPA government of siding with Mukesh.
A Shocking Twist: The Sabotage of Anil’s Helicopter
As tensions reached a boiling point, an alarming incident occurred. In April 2009, Anil Ambani’s helicopter was discovered to have been sabotaged with stones and pebbles deliberately placed in its fuel tank. If the helicopter had flown, it would likely have crashed, leading to speculation that someone was attempting to kill Anil. Although the culprit was eventually found dead with a suspicious suicide note, the case raised serious questions about the extent to which the Ambani feud had escalated.The Downfall of Anil Ambani: A Series of Missteps and Misfortunes
Anil Ambani's business empire began to unravel with a series of court battles, internal family strife, and miscalculations that would ultimately lead to his financial ruin. One of the most critical moments came during the "gas war" between him and his brother, Mukesh Ambani, which ended with a decisive judgment from the Supreme Court. The court ruled that natural gas is government property, leaving Anil's power projects in jeopardy while giving Mukesh a substantial advantage.The Non-Compete Agreement Termination
In May 2010, the Ambani brothers announced the termination of their family’s non-compete agreement. This meant that both Anil and Mukesh could now enter any business sector, even directly competing with one another. While Mukesh had emerged victorious from their legal battles, Anil was forced to seek gas for his power plants at market prices, making the road to success even more challenging.Power Project Failures
Anil’s troubles in the power sector deepened with the Dadri power project, which faced opposition from political figures like former Prime Minister V.P. Singh and Congress leader Raj Babbar. In 2009, the Allahabad High Court ruled in favor of the farmers, allowing them to reclaim their land if they returned the compensation received from Anil's company. By 2014, Anil had abandoned this project, citing difficulties in securing gas supplies and returning the land to the farmers.The Telecom Fiasco
Anil’s most significant challenge came in the telecom sector. After inheriting Reliance Communications in the family split, Anil faced intense competition and the need for massive investments as the industry shifted from 2G to 3G, and later to 4G. Reliance Communications took on a staggering ₹30,000 crore loan to invest in the 3G network, but deals with companies like GTL Infratech failed, increasing the financial strain.In 2010, the 2G spectrum scam rocked the industry, and one of Anil’s companies was implicated. Despite this setback, Anil continued investing in 3G, but by then, his brother Mukesh was preparing to launch Reliance Jio, which would offer 4G services and disrupt the market.
The Rise of Reliance Jio and the Collapse of Reliance Communications
Mukesh's decision to launch Reliance Jio with free 4G services marked a turning point. Anil's Reliance Communications, already struggling, could not compete. Mukesh had learned from his earlier missteps in choosing CDMA over GSM for SIM cards, which limited his ability to upgrade to 4G. Anil had to invest heavily in switching from CDMA to GSM, but by the time this transition was completed, companies like Vodafone and Jio had overtaken Reliance Communications.
By 2016, Anil's company had fallen to fourth place in the market, and with mounting debts and failed mergers—including a failed deal with Aircel in 2017—the business was on the verge of collapse.
The Final Blow: Debt and Legal Troubles
As Reliance Communications' debts soared to ₹43,000 crore, Anil attempted to sell parts of the business to reduce his financial burden. However, failed deals with companies like Brookfield and TPG made recovery impossible. Eventually, Anil turned to Mukesh for help, offering to sell key assets of Reliance Communications, including wireless spectrum and towers, but even that deal fell through when Mukesh refused to take on the company's debt.By 2018, creditors began to pursue legal action. Ericsson filed a case against Anil for defaulting on payments, and the Supreme Court ordered him to repay ₹550 crore or face jail time. Mukesh ultimately bailed out his younger brother, paying off the debt to prevent his imprisonment.
Conclusion: A Combination of Bad Luck and Poor Decisions
Anil Ambani's downfall can be traced to a combination of factors, including bad luck, poor strategic decisions, and overly ambitious ventures. Entering capital-intensive sectors like power and telecom without a clear plan or sufficient financial backing, especially after the 2008 global financial crisis, set the stage for his decline.The financial troubles that began in 2014, coupled with the failure of major projects and mounting debt, ultimately led to the insolvency of Reliance Communications in 2019. Anil's reliance on political connections to secure funding and his inability to innovate and adapt in competitive industries contributed significantly to his business empire's collapse.
Anil Ambani’s story serves as a cautionary tale of how ambition, without proper strategy and financial discipline, can lead to financial ruin—even for someone once considered among the richest in the world.
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