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The Fall of Anil Ambani | From $45 Billion to $0 Net Worth | Dhruv Rathee

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Anil Ambani’s companies were in debt to the tune of ₹1,720 billion.” “Not only from Indian banks, but he had also taken loans from Chinese banks.” “He started blaming all his business failures on Mukesh Ambani.” “Their mother asked Mukesh to stop Anil from going to jail.

This was a big shock for Anil Ambani.” “But it wasn’t the only one.” “Was someone trying to hurt Anil Ambani?” Hello, friends. In 2008 Anil Ambani was the 6th richest person in the world. His wealth was $42 billion, more than his brother Mukesh Ambani. But fast forward 16 years, today, in 2024, Anil Ambani is no where to be seen.

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Debtors are chasing after him. There are several court cases pending against him, and SEBI has now banned him from the Indian market for the next 5 years. How did this happen? The story of this downfall is based on a fight between two brothers which is not widely known. This fight had an impact on the political and financial system of our country.

Politicians from different parties were also involved in this fight. Friends, in today’s video, let’s find out the story of Mukesh and Anil Ambani. Friends, before we begin this video, let me tell you that the things that I’ll talk about in this video, might be very shocking to you. But I haven’t made up any of them.

They aren’t my opinions. Each line, each source, are from published news articles or books. The sources are provided in the description in case you want to refer to those. The story begins with their father, Dhirubhai Ambani. At one point, Dhirubhai Ambani used to be a gas station attendant. But by the 1980s, he was one of the biggest businessmen in India.

In February 1986, he suffered a stroke and his right hand became paralysed. It was only after this that he started handing over his businesses to his sons, Mukesh and Anil. Mukesh Ambani was a bit of an introvert. So, he used to handle operations. His role was to set up mega projects within time and budget.

On the other hand, Anil Ambani was an extrovert. That’s why he became the public face of Reliance. His role included public relations, corporate affairs, lobbying and marketing with the government. In 1991, Dhirubhai made Mukesh Ambani the Vice Chairman of Reliance while Anil Ambani remained the Joint Managing Director of the company.

This was a clear indication that Dhirubhai preferred Mukesh. And it was seen as an indication that Mukesh would take over Reliance after Dhirubhai. With time, Mukesh started taking over more and more of Reliance’s activities. He started placing his friends in Reliance. Like Anand Jain and Manoj Modi. You might be wondering why Dhirubhai preferred Mukesh, and not Anil.

For many reasons. One of them was the family dynamics. Anil Ambani’s decision to marry Tina Munim. Tina Munim was a glamorous Bollywood celebrity of her time. She had been a Miss India. And her first film Des Pardes was a big hit. In the 1980s, she was seen as a modern Indian woman. Her clothes were considered revealing at that time.

She was in a live-in relationship with famous actor Rajesh Khanna at one point. Anil Ambani met her at a party. Both of them liked each other and Anil decided to marry her. But there was a problem, a social hurdle. The Ambani family was a conservative Gujarati family. And they weren’t willing to accept Tina as their daughter-in-law.

Dhirubhai Ambani opposed this marriage. In fact, he tried his best to break them up. Gas Wars: Crony Capitalism and the Ambanis Look at page 41 of this book. Dhirubhai Ambani used his clout within the government and orchestrated an ED raid on Tina. This 2015 article in the Caravan Magazine confirms that there was an ED raid on Tina.

But despite his father’s objections, Anil was adamant about marrying Tina. Anil also found out that the ED team had misbehaved with Tina. After this, Anil threatened Dhirubhai that if he doesn’t accept Tina as his daughter-in-law, Anil would leave the family. This was a complete filmy drama. After this, the family and friends intervened and convinced Dhirubhai to let this marriage be.

They got married in February 1991, and Tina Munim became Tina Ambani. On the other hand, Mukesh’s story was the complete opposite. Mukesh married the girl his mother chose for him. His mother, Kokilaben, saw Neeta Dalal in a Bharat Natyam dance recital and this led to the marriage of Mukesh and Neeta. Neeta Dalal became Neeta Ambani and was considered the real daughter-in-law of the family.

While Tina remained an outsider. Dhirubhai and Kokilaben depended on Neeta for important family decisions. On the other hand, Tina barely played any role in the family. On top of that, in 1994, something interesting happened. Sandeep Tandon, who had been an IRS officer, who had raided Tina’s house, joined Reliance as a consultant.

Obviously, he joined Reliance with Mukesh’s approval and Anil was very upset about it. It’s said that Mukesh believed that only he could take Reliance into the 21st century. The world started noticing this when Reliance entered the telecom sector. Reliance Infocomm was founded and neither Anil nor any of his supporters were given major roles in this company.

Reliance Infocomm was owned by another company Reliance Communication Infrastructure Limited. 50.55% share of the holding company was held by Mukesh and Nita Ambani and 45% share was held by RIL. RIL was Reliance’s main company. The Chairman and Managing Director of RIL was Mukesh Ambani himself. And the top positions were held by people like Manoj Modi, Anand Jain, and Bharat Goenka who were considered as Mukesh’s loyalists.

Anil Ambani saw this as a clear sign that Mukesh was sidelining him and that Mukesh did not consider him as an equal partner. Along with this, Anil also felt that his role in the company, managing politicians, bureaucrats, and media was not being appreciated. Anil Ambani used to deal with global fund managers to ensure Reliance’s growth.

Anil Ambani saw this as a clear sign that Mukesh was sidelining him and that Mukesh did not consider him as an equal partner. Along with this, Anil also felt that his role in the company, managing politicians, bureaucrats, and media was not being appreciated. Anil Ambani used to deal with global fund managers to ensure Reliance’s growth.

But he was upset that Mukesh Ambani was giving more importance to his loyalists. Even though Dhirubhai Ambani was alive, by 1999, there was a falling-out between the two brothers. The Reliance Group was divided into two factions. The Pro Mukesh Group and the Pro Anil Group. Dhirubhai knew that his sons weren’t on friendly terms.
But he was upset that Mukesh Ambani was giving more importance to his loyalists. Even though Dhirubhai Ambani was alive, by 1999, there was a falling-out between the two brothers. The Reliance Group was divided into two factions. The Pro Mukesh Group and the Pro Anil Group. Dhirubhai knew that his sons weren’t on friendly terms.

But instead of dividing the business, he took a different route. In March 2002, he announced a mega-merger of the Reliance companies. He merged Reliance Petroleum with Reliance India Ltd. It is believed that he did so because he thought that it would make it impossible to divide the Reliance Group and the brothers would have to work together.

But instead of dividing the business, he took a different route. In March 2002, he announced a mega-merger of the Reliance companies. He merged Reliance Petroleum with Reliance India Ltd. It is believed that he did so because he thought that it would make it impossible to divide the Reliance Group and the brothers would have to work together.

But this does not happen. 6th July 2002, Dhirubhai Ambani passed away. After this, Mukesh Ambani took over Reliance’s control, and Anil Ambani became the Second-in-Command. But a few months later, tensions between the two brothers started to grow further. Anil Ambani felt that Mukesh was using RIL to finance his telecom venture and to get personal benefits for himself and his friends.

But this does not happen. 6th July 2002, Dhirubhai Ambani passed away. After this, Mukesh Ambani took over Reliance’s control, and Anil Ambani became the Second-in-Command. But a few months later, tensions between the two brothers started to grow further. Anil Ambani felt that Mukesh was using RIL to finance his telecom venture and to get personal benefits for himself and his friends.

Apart from this, Neeta Ambani’s role in Reliance Infocomm role was on the rise. She was looking after Reliance Infocomm’s advertising and branding. Anil Ambani wasn’t on board with all of this. He started expressing his opposition. Three months later, in July 2004, Reliance Board restricted Anil Ambani’s financial powers and gave Mukesh Ambani full financial powers.

Along with this, they passed another proposal that the Vice Chairman should work under the Chairman’s supervision. Anil began to realise that Mukesh was trying to sideline him entirely. After Dhirubhai’s death, Anil wanted his mother, Kokilaben, to become Reliance’s Chairperson. But Mukesh refused to agree with this and said that it would send a wrong message to international investors.

If we look at things from Mukesh Ambani’s perspective, take a look at these old articles. He believed that Anil wasn’t serious about doing business. And the reason was Anil’s closeness with Samajwadi Party’s Mulayam Singh Yadav and Amar Singh. Mukesh was very uncomfortable with this. Dhirubhai Ambani had close ties with politicians too, like Indira Gandhi, but he was on good terms with all politicians.

He did not favour any particular politician, But Anil Ambani was getting too close to Samajwadi Party. In June 2004, Anil Ambani filed a Rajya Sabha nomination as an independent candidate from UP. And he won with Amar Singh and Mulayam Singh Yadav’s help. This was because Congress was newly elected to form the central government.

And the Samajwadi Party was one of Congress’s main rivals back then. Unlike today, when they are allies, back then the two parties opposed each other. Mukesh Ambani felt that it wasn’t good for the Reliance’s business interests for Anil Ambani to be getting so close to an opposition party. Since Congress wouldn’t like it.

Apart from this, when Anil Ambani had filled his nomination for Rajya Sabha, he had to declare his and his wife’s wealth. This was another reason for Mukesh’s displeasure; everyone finding out how much money he had. There was a third reason too. Mukesh was unhappy with Anil’s power generation project.

Anil Ambani had announced his plans to start a gas-based electricity power plant in Dadri, Uttar Pradesh. He said that the gas for the plant would be from the gas discoveries in the Krishna-Godavari Basin. Mukesh believed that Anil had forced this project on Reliance only because Anil wanted to please Amar Singh and Mulayam Singh Yadav.

Late 2004, by this point, the relationship between the two brothers had reached a breaking point. In a front-page report, the Times of India reported on a “Brothers’ Feud” between the brothers of a ‘major business group.’ Back then, most publications had the courage to publish daring news.

Not like today when everyone’s trying to please a certain group of people. After this, on 18th November 2004, two interesting things happened. Mukesh Ambani attended a CNBC TV18 Business Seminar and the CEO of Microsoft Steve Ballmer was also there. Steve was Mukesh’s classmate and friend. They studied together in Stanford Business School.

In the seminar, he said something very shocking. He said in his batch at Stanford Business School, there were only 2 people who dropped out in the first year. Steve and Mukesh Ambani. The audience was shocked to hear this. Because for years, the world thought that Mukesh Ambani had completed his MBA from Stanford.

That was the stance in Reliance’s official documents too. So, Mukesh was quite upset at this speech and left the seminar early. But before leaving, he made another announcement. He said that there were ownership issues within the Reliance Group but it was in a private domain. No one was sure why he said so publicly.

Before that, the differences between the two brothers was not public knowledge. A few days later, Mukesh changed his statement and said that there were no ownership issues in the Reliance Group and that while Dhirubhai was alive, he had solved all the issues. But by then, it was too late. The media was already talking about it.

This fight between the two brothers gradually turned into an open war and it played out in front of the media. Anil Ambani had the upper hand in this. One after another news about Mukesh was being published. His dealings with the politicians. About how he was using Reliance for his benefit. His issues with corporate governance.

Everything was published publicly. News reports also mentioned that Mukesh was mistreating his younger brother, Anil. Over the next 7 months, Mukesh Ambani’s public image deteriorated. By December 2004, the situation was so terrible that our country’s Finance Minister P. Chidambaram had to intervene.

He said that the entire country was suffering because of the feud between the two brothers. The FM asked them to stop fighting. There was government pressure too. Prime Minister Dr Manmohan Singh had to put pressure on them as well. Although the PMO denied it later. Apart from this, their mother Kokilaben wanted to have this sorted out.

And the Chairman of ICICI Bank and their family friend K.V. Kamath intervened as well. Under the pressure from all of them, Mukesh Ambani agreed to a truce. In June 2005, apparently, both brothers resolved their differences and an agreement was signed by the brothers. As per this agreement, Mukesh got flagship companies like RIL and Indian Petrochemicals Corporation Ltd.

This company was sold to Reliance by the Atal Bihari Vajpayee government in 2002. On the other hand, Anil Ambani got Reliance Infocomm, Reliance Energy, and Reliance Capital. Both brothers signed a 10-year-long non-compete agreement. If one of them was working in any sector, the other brother will not try to compete with it for at least 10 years.

Under this agreement, broadly speaking, Mukesh Ambani got 60%-70% assets of the Reliance Group. And Anil Ambani got 30%-40% assets. After this, by 2007, Anil Ambani’s net worth had tripled. $45 billion. While Mukesh Ambani’s net worth was $49 billion. Their net worths were quite similar. Everyone assumed that the fight between both brothers had permanently ended.

 

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