great caution, leading to constant tension with Dhirubhai who was a risk-taker. <strong>The</strong>final rupture came after one clash when, at Dhirubhai’s urging, Reliance built up alarge holding of yarn in the expectation of a price rise. Damani pressured Dhirubhaito cut back their exposure. So Dhirubhai sold the yarn stockpile-to himself, in secret.Two or three weeks later the price of yarn shot up and Dhirubhai made a killing.‘Later Dhirubhai told Chambaklal: “I am prepared to share profit with you,” Vakhariasaid. “But in future if you do not know the business, do not intervene.” Many othersamong Dhirubhai’s ex-colleagues and trade associates also believe the partners wereincompatible.‘He takes so much risk that people fear something will go wrong,’ said VradialDepala, who knew Dhirubhai in Aden. ‘But the risks are all calculated. <strong>The</strong>y are notblind risks.’ ‘You may be a co-passenger in a car with me, but if you don’t like mydriving you might be a little fearful,’ said Manubhai Kothary, a leading Bombaytextile exporter and long-time president of the Silk and Art Silk Mills ResearchAssociation.‘Someone advised partner that he had made sufficient money and now should comeout,’ said Susheel Kothari, the ex-colleague from Besse & Co who later worked forReliance. ‘s business is catching live serpents.’s Chambakial Damani himself will sayonly that ‘he agreed to separate willingly’ or that ‘he just became separate asfriends’. But he agreed that the version given by Kothari and others aboutdifferences over commercial risk were to some extent true’. Damani went intotrading in a new company, while Dhirubhai and his brothers paid some Rs 600,000 tobuy him out of Reliance. Soon after, Dhirubhai moved the office to bigger premisesin the more central Court House building at Dhobi Talao, named for the laundrymenwho originally worked in the area.After ten years at Bhuleshwar, in 1968, Dhirubhai moved his home out of the chawlto a more comfortable fat in Altamount Road, one of the city’s elite areas on a hilloverlooking the Arabian Sea. Fond of driving fast, Dhirubhai had first bought a Fiatcar, and then moved on to a Mercedes-Benz. Later, in the 1970s, he indulged a tastefor flashy automobiles by acquiring a Cadillac, one of the very few in the countrythen or since.Friends remember him as a dashing figure, the slightly dark skin inherited from hisfather (the only such characteristic, some say) offset by a white safari suit, the hairslicked back into a duck’s tail. For a while he put on weight, and then trimmed downby taking vigorous dawn walks along the three-kilometre sweep of Bombay’s MarineDrive, enlisting friends, colleagues and neighbours as companions.Within a year of splitting with Damani, Dhirubhai took Reliance into textilemanufacturing for the first time. He decided to locate it in Gujarat rather thanBombay, because of the cheaper land prices, and sent his older brother Ramnikbhaito select a site. Ramnikbhai enlisted Vakharia, then starting to get known as alawyer in Ahmedabad, and the two drove around the state in a small Fiat.<strong>The</strong>y settled on a 10000 square metre plot, the last going in a new industrial estatedeveloped by the Gujarat state government at Naroda, on the fringes of Ahmedabad.Vakharia had got a contact, state minister for industries Jaswant Mehta, to approvethe purchase, and by a further stroke of luck the farmers owning some 100 000square metres of adjacent land were willing to sell. Dhirubhai had a simple factorybuilt, installed four knitting machines, and appointed his brother as plant manager.
Dhirubhai was again lucky in that, around this time, the British hold on Aden wasbecoming more tenuous. Even ahead of the British withdrawal in 1967, foreignnationals felt threatened by the insurgency mounted by the People’s Liberation Front.Many of the Indians working for Besse & Co decided it was time to go home. SoDhirubhai had a ready-made source of educated managers, accountants andsalesmen, drilled to European standards. <strong>The</strong> word went around that Dhirubhaiwould find jobs for his old colleagues, and a dozen old hands from Besse & Coaccepted his offer. Most stayed for the rest of their working careers, with the last fewbeing retired from senior management positions in 1993 in a deliberate move byDhirubhai’s sons to rejuvenate the company’s leadership.None of them knew very much about textile production, however, and it was a caseof learning by trial and error. ‘All of us were new,’s recalled M. N. Sangvi, who leftAden in 1967 and immediately joined Reliance. ‘It was very small, only about 20people in the whole factory, about five or six from Aden. Nobody was familiar withtextiles, and after 15 years in Aden I was not knowing anything about India either.<strong>The</strong> first two years, 1966-67, was a very hard time. <strong>The</strong> product had to beestablished. We worked from morning to late evening. Dhirubhai was veryencouraging, and we had a family atmosphere. <strong>The</strong> employer- employee relationshipwas not there. He put a lot of trust in us’.Susheel Kothari, who had returned from Aden in 1966, said that at one point in 1967it appeared the mill would have to close down because Reliance could not sell thecloth it was making. Dhirubhai told Kothari that if the factory had to shut down heshould do it gradually and see that no blame attached to his older brotherRamnikbhai. But the Aden hands rallied. After putting in a full shift at the factory inNaroda, from 7 am to 3 pm, they would spend the afternoons and evenings touringmarkets around Ahmedabad trying to persuade shopkeepers to stock Reliancefabrics. ‘We were determined we should not fail,’ Kothari said.Dhirubhai worked everyone hard, often calling his managers in Naroda at 6 am fromBombay before they started out to work. <strong>The</strong>y were expected to solve problems ontheir own initiative. Dhirubhai himself set the example. Suresh Kothary recalled oneincident when spare parts were urgently needed for imported machines at Naroda.Dhirubhai had the parts flown in from Germany, and then discovered that no truckswere available for the haul up to Ahmedabad. He bought two trucks, one to carry theparts and one as a backup, and sent up the consignment. <strong>The</strong> trucks were then soldin Ahmedabad.But he was forgiving of honest mistakes, recalls Sangvi. In one case, Sangvi wasover trusting of some merchants who had placed an order from Patna, the capitalcity of Bihar state across in eastern India. Sangvi sent the consignment by rail,collectable on presentation of a payment receipt at a Patna bank branch. <strong>The</strong>merchants forged the receipt and took delivery from the railway yard. Reliance lost900000 rupees, a considerable sum at that stage, and it took months to recover it.Sangvi said: ‘Dhirubhai just told me: “Nathu, nothing to worry in business, anythingcan happen. I know you have done it to increase the sales. I am with you and youjust concentrate on the business.” Reflecting back on his career, as vice-president ofthe Reliance textile division, Sangvi said: ‘I feel myself very fortunate that I havebeen working under such a legendary figure.’ I, Patel, who had been recruited by hisrelative Maganbhai Patel to Besse and Co in 1953, returned to India in 1965. Soonafter, Ramnikbhai Ambani, with whom he had worked in the Besse automotivedivision, hired him for Naroda and put him in charge of the knitting machines. Patel
- 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
- Page 13 and 14: proportion of these from Kathiawar.
- Page 15 and 16: looked far beyond their immediate p
- Page 17 and 18: which involved boycotting imported
- Page 19 and 20: One of the students was a fellow Mo
- Page 21 and 22: The outpost had been a punishment s
- Page 23 and 24: As he developed more familiarity wi
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- Page 39 and 40: Over two years in the early 1970s,
- Page 41 and 42: captive market. The ‘Eleven Day W
- Page 43 and 44: GURU OF THE EQUITY CULTIndira Gandh
- Page 45 and 46: politicisation of the machinery Fro
- Page 47 and 48: By the end of 1986, Dhirubhai was t
- Page 49 and 50: Reliance made sure that a comment b
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- Page 55 and 56: Friends in the right PlacesThis was
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- Page 61 and 62: in the Telegraph’s leader. Facing
- Page 63 and 64: In December 1983, Dhirubhai had hos
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- Page 67 and 68: give money to political parties. We
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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