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He sparked an investors' revolution

By Sushma Ramachandran

NEW DELHI JULY 7. Dhirubhai Ambani, the founder of an over Rs. 65,000 crore empire was always known by his first name, an indicator of the man's down-to-earth personality.

Everyone has a favourite story about Dhirubhai and his grassroots approach to life and living. Many will tell you how he sat in five star hotels in Delhi and ordered `masala dosa' from the UNI canteen. Others will tell you how he put his feet up on the sofa, invited his guest to do the same before having a drink and a cosy chat. A colleague who was summoned to Mumbai to visit him for a day travelled around the city in Dhirubhai's personal six-door saloon as compensation for not being received at the airport by a company car.

The fact is, the best stories about Dhirubhai are told by people who have never met him. These include ordinary middle class investors who bought Reliance Textiles shares for Rs. 10 each in 1977 and reaped a bonanza. One of these was my father who sold off his Reliance shares to finance my younger brother's wedding. Another was a close friend who had tipped me off in 1977 that I should buy shares in this unknown company. In the event, I did not even apply but she did and the small fortune from these shares is helping to put her children through college in the U.S.

There is no doubt that Dhirubhai Ambani single-handedly created an investors' revolution in this country.

The stock markets suddenly came within the reach of the man on the street when Reliance Industries began its spate of public and rights issues. From being the preserve of the wealthy, investing in company shares became a mass affair with shareholding forms being sold on pavements. The ultimate expression of the expansion of the investing community came when he held an annual general meeting of the company at a stadium in Mumbai.

Similarly, Dhirubhai created a storm within industry as his company expanded in a well-planned manner though every step was shrouded in political and corporate controversies. From trading in textiles, he moved to manufacturing synthetic textiles and then to producing the synthetic raw materials — petrochemicals — needed for these fabrics. In a dramatic move towards complete backward integration, Reliance then set up a petroleum refinery which would produce the raw materials needed for their petrochemicals complex. It sought to even become a completely integrated company by going in for oil production.

In the process, Reliance became the barometer for the stock markets and anything going right or wrong with the company tended to put the markets in a spin. In the process also, Reliance Industries became a by-word for all that is wrong with corporate governance and business ethics in the country. Allegations have always been flying fast and furiously about the extent to which Government decisions in the petrochemicals and petroleum sectors have been influenced by the company. There is no doubt that the company wielded enormous influence among the bureaucracy as well as among politicians and the media. To what extent this has been due to money power has never been proved, but there are virulent anti-Reliance campaigners along with an equally staunch pro-Reliance lobby among politicians, bureaucrats and the media.

The famous battle between Bombay Dyeing and Reliance Industries over PTA and DMT capacity creation with the print media deeply involved in taking sides was one of the first controversies in which the company was embroiled and there have been many others since then. Even selection of Union Finance Ministers and toppling of State Governments have been attributed to the long arm of Reliance.

As far as industrial projects were concerned, however, Dhirubhai made no compromises on quality and created each plant as a state-of-the-art unit. Efficient operations led to sustained profitability, high dividends and happy small investors. It was only in the print media that Reliance faltered as the Business and Political Observer (BPO) failed to make a mark as a business paper. Even so, the newspaper set new standards for journalistic salaries as Reliance laid down norms for payments of conveyance, medical and leave allowances, till then a pittance in most newspapers.

Dhirubhai's empire will be taken over by the two sons, Mukesh and Anil Ambani who are already effectively running the show.

But Reliance will miss the blood and guts approach of the entrepreneur who rose from nowhere to create a corporate monolith larger than any other in India.

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