The end of the begin

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The Reliance mystique is finally dead! Long live the Ambani legacy...

Things were far easier - and bloodier - for inheritors when Emperor Ashoka had to battle his brothers for his father’s legacy and control of the Mauryan Empire. Two thousand odd years later, when Aurangzeb indulged in a bit of fratricide to control the Mughal Empire, brothers in arms were still brothers armed to kill each other. At least Mukesh and Anil Ambani will not suffer the fate of the forgotten brothers of Ashoka and Aurangzeb. Rather than being put to the sword, both brothers will get a chance to test their gladiatorial skills in the arena that matters the most in the 21st century: the market place.

In many ways, the manner in which the media is writing about the split in the Dhirubhai Ambani Empire is reminiscent of history repeating itself. For the last twenty years, every year or so, the media has been writing off the first generation Reliance empire. Every time, the late Dhirubhai Ambani has risen Phoenix like from mythical ashes of corporate doom. For media Cassandras writing the epitaph of the Ambani Empire, the brothers Mukesh and Anil might just spring surprises.

To be sure, the split has killed the natural synergies that the two could exploit; to be sure, bad blood between the two might signal the end of their invincibility when it comes to ‘managing the environment’. Besides, the brothers have been transformed from being partners to rivals. And in the Ambani lexicon, rivals are not tolerated but actually stamped down and exterminated.

Yet, pundits fail to see the silver lining behind these clouds. There is little doubt that both the siblings will be fired up with a passion to prove that they are the true and only inheritors of Dhirubhai’s entrepreneurial and wealth creating legacy. Both will give their all to race ahead of the other, just to prove a point if nothing else. If the brothers manage to curb their aggressive managers from cutting corners and dancing on the fringes of illegality (See related story on Reliance Infocomm), it is even possible for the two to acquire the ‘Bramhinical’ respectability that has eluded them till recently. So powerful has been Reliance’s clout till now, that the Ambanis have simply swept aside those who raised their eyebrows 20, 15 and 10 years ago. Yet, if ostensible corporate perceptions were to be personified, the divided Ambani family, like the current Australian cricket team on a tour of England, no longer projects that aura of invincibility.

At the moment, the elder brother Mukesh seems to hold all the cards (See Chart). But Anil has snagged the ‘sunrise sector’ businesses. Mukesh is now the undisputed king of backward and forward integration. From oil and gas, he controls the petroleum, petrochemicals, intermediates, polyester yarn and textiles.

But he will obviously miss Reliance Infocomm, the ‘baby’ that he nurtured with verve to fulfil Dhirubhai’s infrastructure ambitions. He might also miss Anil’s ‘famed’ finance skills when he invests in new projects. Anil, will of course badly miss the Reliance Industries umbrella as he battles competitors ranging from Ratan Tata to Sunil Bharati Mittal to recreate the Ambani magic.

It would actually be churlish to confidently forecast where the Ambani brothers and their respective empires would be 20 years down the road. But there is one thing that even failed astrologers can predict with complete confidence: the real drama and action related to the Ambani saga has just begun!

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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