LESSONS FROM THE SOUKEarly in the 1950s, officials in the treasury of the Arabian Kingdom of Yemen noticedsomething funny happening to their country’s currency. <strong>The</strong> main unit of money, asolid silver coin called the Rial, was disappearing from circulation. <strong>The</strong>y traced thedisappearing coins south to the trading port of Aden, then a British colony andmilitary bastion commanding the entrance to the Red Sea and southern approachesto the Suez Canal.Inquiries found that an Indian clerk named Dhirubhai Ambani, then barely into histwenties, had an open order out in the souk (marketplace) of Aden for as many Rialsas were available. Ambani had noted that the value of the Rial’s silver content washigher than its exchange value against the British pound and other foreigncurrencies. So he began buying Rials, melting them down, and selling the silveringots to bullion dealers in London. ‘he margins were small, but it was money forjam, Dhirubhai later reminisced. After three months it was stopped, but I made afew lakhs [one lakh = 100000 rupees] of rupees. I don’s believe in not takingopportunities.” Dhirubhai had gone to Aden soon after finishing his studies inJunagadh at the age of 16, following the long tradition of boys from Bania families inKathiawar heading for the Arabian trading ports or the market towns of East Africa togain commercial experience and accumulate capital.A network of personal contacts kept jobs within the same community. Dhirubhai’selder brother Ramniklal, known as is Ramnikbhai, had gone to Aden two yearsbefore, and was working in the car sales division of A. Besse & Co. Founded by aFrenchman named Antonin Besse, the company had developed from trading inanimal hides and incense between the world wars into the biggest commercial housein the Red Sea area, selling cars, cameras, electrical goods, pharmaceuticals, oilproducts and food commodities to both British and French territories in the Arabworld and the Horn of Africa, as well as to Ethiopia.Another Gujarati, Maganbhai Patel, from the Porda district, joined Besse as a junioraccountant at the age of 18 in 1931 and was made a director in 1948. He estimatesthe company controlled about 80 per cent of the region’s commerce soon after theSecond World War. It had 30 branches, and six to eight ships of its own in thesubsidiary Halal Shipping. It was indeed successful: shortly before his death at theage of 72 in 1948, Antonin Besse made a donation of one million pounds to endow StAnthony’s College in Oxford.<strong>The</strong>reafter, the company was run by two of his sons, Tony and He was hired, andsoon after arrived by steamer in Aden. As Susheel Kothari notes: ‘<strong>The</strong> first sight ofAden is always a shock.’ <strong>The</strong> oil-filled blue waters of the port are backed by steepcrags of dark-brown rock, remnants of an old volcano, with no sign of vegetation.Aden had flourished in Roman times as a way station on trading routes betweenEgypt and India. <strong>The</strong> opening of the Suez Canal in 1869 revived its importance, andit became a major coaling port for European shipping to Asia and Australasia. Fromits occupation by a detachment of Indian sepoys sent by the East India Company in1839, Aden had been an important link in the ties of Britain to the Indian Raj. Until1937, when it was put under the Colonial Office in London, the territory wasadministered from India. <strong>The</strong> Indian rupee circulated as its currency until it wasreplaced by the East African shilling in 1951.
<strong>The</strong> outpost had been a punishment station for British regiments deemed to haveshown cowardice or other offences against discipline while in India. As one of its lastgovernors, Charles Johnston, noted in a memoir, it had been ‘he dumping ground,even as late as between the wars, to which regiments sent officers who had gotthemselves into matrimonial difficulties’.<strong>The</strong> colony also became the entrepot for the Red Sea and Horn of Africa, wheredeep-water ports were few. Cargoes of cattle hides, coffee, aromatic gums and pearlshell were brought to Aden by wooden sailing dhows, and bought by trading firmslike Besse, Cowasji Dinshaw, Luke Thomas and Cory’. In return, basic commoditiessuch as sugar, rice and textiles were shipped back.Between the world wars, the biplanes of the Royal Air Force kept the hinterland quietby machine-gunning the villages of any unruly Yemeni tribesmen. Behind this shieldof bullets, the middleman trade flourished. <strong>The</strong> definitive historian of British rule inAden, R. J. Gavin, noted:Aden indeed consisted of a hierarchy of brokers from the heads of foreign firms tothe lowest workman or child who offered his labour or hawked in the street.Speculators, hoarders and price rings frequently sent commodity and foodstuff pricesrocketing up and down, while moneylenders and dealers dampened the effect of thisfor the rest of the population at a price which included a claim to social leadership.Acquisitive individualism was mitigated only by ethnic and other local solidaritiesformed outside rather than within the town. Aden’s economy developed rapidly afterthe Second World War, but its business milieu still had some of this character whenDhirubhai learnt his basic techniques in the 1950s.<strong>The</strong> spur to Aden’s growth was the decision of British Petroleum to build a new oilrefinery in Little Aden, another crater jutting into the sea across the bay from themain town. BP’s existing refinery in the Gulf port of Abadan had been nationalised bya new Iranian government. <strong>The</strong> refinery employed up to 11000 workers at any onetime during its construction over 1952-54, and then had a permanent staff of 2500housed in a comfortable village. This sparked off a construction boom which sawAden extend be-yond the wastes and saltpans of the causeway which had been keptclear for defensive reasons in earlier times.Later in the 1950s, the British began concentrating strategic reserve forces in Adenfrom other bases in the Gulf and East Africa. By 1964, Aden had some 8000 Britishmilitary personnel plus dependents-and their demand for housing kept theconstruction activity going. Aden’s population grew from 80000 in 1946 to 138000 in1955.It became a more modern economy, and air-conditioning ameliorated the hothumid weather in the midsummer months. But it retained many exotic features,including the daily inward fight by Aden Airways of the mild narcotic called qat. Froma hedge like bush in the mountains of Ethiopia, the qat leaves had to be consumedfresh and were delivered to consumers in Aden within a few hours of plucking atdawn. ‘It is not medically harmful, so far as can be ascertained,’ noted Johnson, theformer governor, although if taken in excess it lowers the appetite and produces acharacteristic green-faced, cadaverous appearances.Just before mass air travel arrived with the first passenger jets, Aden overtook NewYork in 1958 to become the biggest ship- bunkering port in the world. As well as forcargo shipping and tankers, it was a refueling stop for elegant liners of the P &- 0and Orient Lines as well as crowded migrant ships taking Italians and Greeks out toAustralia.
- Page 2: AcknowledgementsIntroduction: an in
- Page 7 and 8: several years. I sent off some clip
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- Page 11 and 12: A PERSUASIVE YOUNG BANIAAmong all t
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- Page 15 and 16: looked far beyond their immediate p
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- Page 33 and 34: A FIRST-CLASS FOUNTAINDhirubhai Amb
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support the big investment in domes
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others. Orkay was accused of pledgi
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corruption. On the backs of ordinar
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Financial Express, had carried both
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constant ridicule and demonisation.
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inquiries overseas, the little-trav
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conversion was allowed, the holding
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The company’s shares had already
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In a four-part article published ov
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The case against Reliance had been
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companies, possibly to help strengt
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Nusli Wadia’s children). Pandit b
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carrying a relentless, campaign of
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The committee asked Reliance at lea
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To clinch a prosecution under the F
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operators of the Indian havala trad
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While the law enforcers were closin
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the obligatory disclosures in the p
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On 5 December, the Central Excise a
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LETTING LOOSE A SCORPIONDhirubhai A
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identified himself as an inquiry ag
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But the CBI’s two investigating o
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had been booked into the hotel unde
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dismissing Rajiv and appointing ano
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extended and gruelling interrogatio
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BUSINESS AS USUALDhirubhai Ambani w
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udget for the year starting April 1
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asket from UTI (by value) were Lars
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on the Financial Times of London. A
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1988, two allied activists, journal
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But just as the opposing forces see
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had continued social meetings with
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they recorded Babaria calling Kirti
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arrests on 1 August. When a reporte
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After the initial appearance of Kir
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Though he could not avert the storm
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Dhirubhai’s new newspaper, launch
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and indifferent to the bloodshed in
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temple at Ayodhya, he put off the f
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arriving at Rajiv’s heavily guard
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Securities and Exchange Board of In
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The shouting continued for half an
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The 1991-92 boom helped Dhirubhai q
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Because of this burden, any other n
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the proceeds of the previous Euro-i
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The telephone licences covered near
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HOUSEKEEPING SECRETSOn 29 November
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compliant bank to give in return fo
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According to sources close to the M
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Merrill Lynch. Jain had meanwhile c
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put on its screens. On 29 November,
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1992 into the tax evasion aspects o
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At least one former fund manager, a
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and avoids a prosecution in court.
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Reliance could no longer look eithe
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other hand, the ANZ Grindlays bank