Minister Pai overruled objections from his department to give Reliance the clearancesto quadruple its texturising capacity in 1975.Two anecdotes are told about confident, even brazen, approach to the muttereddenigration of his success that inevitably sprang up. On one occasion, a rival yarntrader allegedly spread the rumour that Dhirubhai was going bust. He was indeedshort of cash, but went to a public notice board in the yarn market and put up a signinviting anyone he owed money to come and have their advances repaid. No one did.Another story is attributed to D. N. Shroff, president of the Silk and Art Silk MillsResearch Association in the 1970s. Market gossip accused Dhirubhai of blackmarketeering. Dhirubhai asked Shroff to convene a meeting of the association’sexecutive committee, which included many of his critics, and then turned up to faceit. ‘You accuse me of black marketing,’s he challenged, ‘But which one of you has notslept with me?’ All present had bought or sold yarn to Dhirubhai at some stage.In March 1977, however, Indira and Congress were swept from power in theelections called after her two years’ rule under Emergency powers was lifted. But hergovernment gave Dhirubhai a parting gift. Over the 1976-77 fiscal year (April-March)Dhirubhai had accumulated REP licences both from its own exports and frompurchases in the market, worth some Rs 30 million. On 7 February, about threeweeks after the elections were announced; the government was persuaded toexempt all polyester yarn imports under REP licences issued since April 1976 fromcustoms duty, which was then 125 per cent. It was a gift of Rs 37.5 million toDhirubhai.Indira’s replacement was the Janata [People’s] Government, a coalition of anti-Congress parties under Morarji Desai, the austere and self-righteous former financeminister Indira had driven from Congress because he had opposed hernationalisation policies in the late 1960s.But, at least to begin with, Dhirubhai fared well under Janata, helped by the goodoffices of the prime minister’s son, Kantilal Desai. On 22 August 1977, the Janataminister for commerce, Mohan Dharia, abruptly cancelled the High Unit ValueScheme, and allowed any REP licence holder-not just exporters of nylon fabric-toimport a specific quantity of polyester yarn.<strong>The</strong> premium on licences for PFY crashed from 500 per cent to 50 per cent almostovernight. It was reported a year later by the Indian Express that Reliance steppedinto the market to acquire licences at this low premium, and opened letters of creditfor imports totalling Rs 50 million. <strong>The</strong>n, on 2 September, the Chief Controller ofImports and Exports (in the Commerce Ministry) announced another sudden switchof policy. To help Bonafide users of PFY secure their reasonable requirements, thelinkage of exports of synthetic textiles with the import of PFY was restored withimmediate effect. Registered exporters who had entered form import contracts up to2 September would be allowed to import directly. But henceforth all other importerswould have to take their licences to the State Trading Corporation, which would bethe sole channel for imports of yarn.It was not until March 1978 that the first supplies of yarn began reaching Indianmarkets through the STC. Over the six months till then, Reliance took delivery of allthe PFY supplies for which it had contracted, and was able to squeeze a totally
captive market. <strong>The</strong> ‘Eleven Day Wonder’s as the 22 August - 2 September intervalcame to be called, seemed tailor-made for the benefit of Reliance.Whether or not bogus exports were made under the High Unit Value Scheme byDhirubhai has never been proven, and certainly Reliance did make genuine efforts tosell its own products overseas. Its export manager, Rathibhai Muchhala, became afamiliar figure around the trade stores of the Gujarati diaspora in East Africa, theMid-East, and later the United Kingdom, trying to place stocks of Vimal artificial silks.S. B. Khandelwal, the owner of the emporium Sari Mandir (Sari Temple) in theEnglish city of Leicester where many Gujaratis settled after being expelled from EastAfrica, recalls a visit by Muchhala early in the 1970s. ‘<strong>The</strong>y were very anxious to getinto export business,’ Khandelwal said. ‘I took 200 saris on credit. No money wasexpected upfront. Muchhala said: “Just say Shri Ganesh.”(Meaning: Just for luck.)Up until around 1977, exports took between 60 per cent and 70 per cent of thefabrics produced at Naroda, Dhirubhai noted to Business India in 1980. That exportsceased to be a significant activity of Reliance soon afterwards indicates that theywere propped up by the High Unit Value Scheme and the artificial shortages for PFYcreated by import controls.<strong>The</strong> new environment encouraged Dhirubhai to step up his domestic promotion ofVimal and to expand his franchised exclusive shops to more than 600 by early 1980.Advertisements were plastered across newspapers and billboards. ‘Only Vimal offersyou exclusive innovations in high-fashion wear,’ went one, listing products such asDisco Dazzle Sports Jersey or Supertex dress material.It was a Rs 10 million a year advertising spend, then unprecedented in India andmore than four times that of established textile producers such as Bombay Dyeing.And it worked. In 1979, Reliance Textile Industries raised its sales to Rs 1.55 billion(then US$190 million), making it the largest textile producer in the country.Dhirubhai had meanwhile decided to help bring an end to the Janata government ofMorarji Desai. <strong>The</strong> government had not been particularly friendly to him, after theinitial favourable turn in yarn import policy, and Kantilal Desai had become toocontroversial a figure to be much help. A judicial inquiry set up by Morarji Desai inreply to charges of influence peddling by relatives of ministers did indeed find, inFebruary 1980, a Prima facie case for further inquiry’s that Kantilal Desai hadinfluenced the government to relax its policy on PFY imports in August 1977.Dhirubhai put his resources behind Indira Gandhi’s efforts to split the Janatacoalition, which focused on the ambition of the finance minister, Charan Singh, whohad a huge powerbase among the prosperous Jat caste of farmers in Uttar Pradesh.Dhirubhai’s role was to provide the suitcases of cash needed to induce MPs to takethe risk of leaving the government benches and joining the splinter group. In July1979 the Desai government fell when Charan Singh’s supporters withdrew support inparliament. Charan Singh, pledged support by Indira’s Congress, was invited to forma government and demonstrate his support within a month. A vote of confidence wasnever taken: Indira demanded as a condition that Charan Singh agree to withdrawlegislation setting up special courts to try herself and Sanjay for alleged crimescommitted during the Emergency. This he was unable to do. In August, the Presidentdissolved parliament and called elections for the first week of January 1980, withCharan Singh as caretaker prime minister.
- Page 2: AcknowledgementsIntroduction: an in
- Page 7 and 8: several years. I sent off some clip
- Page 9 and 10: esearch led me into all corners of
- 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
- Page 25 and 26: water and haven for international t
- Page 27 and 28: Junagadh named Rathibhai Muchhala a
- Page 29 and 30: eing ‘suite luxurious’ compared
- Page 31 and 32: Dhirubhai was again lucky in that,
- Page 33 and 34: A FIRST-CLASS FOUNTAINDhirubhai Amb
- Page 35 and 36: minority government in 1996, and se
- Page 37 and 38: Corporation of India. Soon afterwar
- Page 39: Over two years in the early 1970s,
- 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
- Page 51 and 52: half-hour of panic just before the
- Page 53 and 54: politicians and bureaucrats. ‘It
- Page 55 and 56: Friends in the right PlacesThis was
- Page 57 and 58: act of parliament as far back as 19
- Page 59 and 60: control, and a very long and favour
- Page 61 and 62: in the Telegraph’s leader. Facing
- Page 63 and 64: In December 1983, Dhirubhai had hos
- Page 65 and 66: Pydhonic to sell his polyester and
- Page 67 and 68: give money to political parties. We
- Page 69 and 70: estimated demand of 80 000 tonnes o
- Page 71 and 72: support the big investment in domes
- Page 73 and 74: others. Orkay was accused of pledgi
- Page 75 and 76: corruption. On the backs of ordinar
- Page 77 and 78: Financial Express, had carried both
- Page 79 and 80: constant ridicule and demonisation.
- Page 81 and 82: inquiries overseas, the little-trav
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- Page 85 and 86: The company’s shares had already
- Page 87 and 88: In a four-part article published ov
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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