Dec 21, 1998
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BOOKS Paging Dhirubhai An Australian journalist's controversial career audit of Ambani. By Ashok Malik POLYESTER PRINCE
Inquiries found that an Indian clerk named Dhirubhai Ambani, then barely into his twenties, had an open order out in the souk (marketplace) of Aden for as many rials as were available. Ambani had noted that the value of the rial's silver content was higher than its exchange value against the British pound and other foreign currencies. So he began buying rials, melting them down, and selling the silver ingots to bullion dealers in London. 'The margins were small, but it was money for jam,' Dhirubhai later reminisced. 'After three months it was stopped, but I had made a few lakhs of rupees. I don't believe in not taking opportunities.' Hamish McDonald, from whose book the extract is taken, bears the innocuous designation of foreign editor, Sydney Morning Herald. He spent the early '90s as the Far Eastern Economic Review's correspondent in India. His experiences here have culminated in a biography of Dhirajlal Hirachand Ambani, chairman, Reliance Industries. The book has India's biggest business tycoon so worried he doesn't want it to reach the country. Earlier this year, HarperCollins was scheduled to release Polyester Prince's Indian edition. When spoken to all Renuka Chatterjee, HarperCollins' editor, says is: "As of now the book is not happening. The matter is sub judice. The Ambanis have secured an injunction in the Delhi High Court against the publication." Nevertheless, the biography arrived at Australian bookstores a week ago. At one level, there is little new in it. Much of the information -- particularly concerning the great war between Dhirubhai and Nusli Wadia of Bombay Dyeing in the mid-'80s -- has already appeared in the Indian press. What McDonald deserves credit for is sheer dogged perseverance. He has collated every available fact on the man -- from Chorwad, the tiny town in Junagadh where Dhirubhai's father was a schoolmaster, to Antonin Besse and Company, the trading firm for which Dhirubhai worked in Aden, to Maker Chambers IV, the seat of the Reliance empire. Strangely, the book project was launched with Dhirubhai's blessings. After writing a laudatory cover story in the Review, McDonald broached the subject in 1992: "Ambani seemed receptive, and agreed that his life story could be 'inspiring' for a younger generation of Indians." A year later, McDonald wrote a critical article which the family saw as "defamatory". That was the end of any cooperation. The authorised biographer became the rogue biographer. Most people refused to speak to McDonald: "Those who did agree to talk for the most part insisted on anonymity." What interests McDonald most is the enormous influence Dhirubhai seems to wield on the Indian government and financial system. For instance, when he wanted to take over Larsen and Toubro (L&T): "In May 1988, the Bank of Baroda set up a subsidiary called BoB Fiscal. Two months later it asked UTI and LIC to help it start a portfolio by selling it baskets of shares. Oddly, 63 per cent of the basket from LIC and 46 per cent of the basket from UTI were L&T shares, bought for a total Rs 270 million on 3 August. BoB Fiscal sold these shares two days later for Rs 300 million to V.B. Desai & Co, a firm of sharebrokers who did a lot of work for Reliance. Later in August, BoB Fiscal repeated the same exercise with GIC, taking delivery of L&T shares for some Rs 141 million, about 55 per cent of the basket from GIC. These were also sold to V.B. Desai and Co, two months later. The brokers then transferred the two lots of shares, amounting to 8 per cent of L&T's equity, to the Reliance offshoot Trishna Investments. Reliance suddenly emerged in October as the biggest non-institutional shareholder in the blue-chip firm." By a remarkable coincidence, the sons of Premjit Singh, then chairman of BoB, ran a "polyester yarn texturising company set up in October 1986 ... (which) worked only for Reliance". Despite such unorthodox business practices, McDonald is optimistic about Ambani's future: "Opium traders, slave owners, market cornerers, share raiders and all kinds of robber barons have been able to transform themselves into establishment." No wonder Dhirubhai is displeased. |
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Early
in the 1950s, officials in the treasury of the Arabian kingdom of Yemen noticed something
funny happening to their country's currency. The main unit of money, a solid silver coin
called the rial, was disappearing from circulation. They traced the disappearing coins
south to the trading port of Aden, then a British colony and military bastion commanding
the entrance to the Red Sea and southern approaches to the Suez Canal. 
