The Delhi Angle

At the January 20 board meeting, his men could have asked the company to investigate charges levelled by Anil against Anand Jain, Mukesh’s closest aide and IPCL director. That would have been a big victory for the younger brother. Or the minister could have pushed for Anil’s ouster to help Mukesh. (Anil had resigned from IPCL posts some time ago.) However, neither of the two scenarios happened at the meeting. Says a family source, "It was status quo. Mukesh made it clear that he’ll not distance Jain, leaving Anil with no future option but to keep attacking both."

However, the Paswan angle hinted at a new twist. Apart from the corporate sleaze that’s appearing in media and secret goings-on in closed boardrooms, there are political overtones to the Reliance crisis. This story is about how politics can influence the individual destiny of the two Ambanis.

It’s clear that the brothers are wooing political bigwigs. Each time they’re in the capital—and the visits have become more frequent since November 2004—the duo separately call on the Congress chief Sonia Gandhi and finance minister P. Chidambaram. "This is a tradition set by the late Dhirubhai. He used to say ‘I pay homage to the chair’. That’s what Mukesh is doing," says an insider. He denies that the meetings had anything to do with the Ambani rivalry. "Mukesh doesn’t discuss those problems with them. And each time they only say that things should be sorted out within the four walls of the family."

We know better because we have heard it from the horses’ mouths. Anil needed to placate the Congress supremo. He had to underplay his political leanings. Last year, he became an Independent Rajya Sabha member with support from the Samajwadi Party—and the hatred between SP and Congress is well-known. It was Anil’s job to convince Sonia that his SP links don’t imply that he’s against the Congress. That explains why Amar Singh, a close aide of SP leader Mulayam Singh Yadav, was restrained from commenting on the Ambanis, except the one statement that Kokilaben, the mother of the two siblings, will find a solution to the imbroglio. "We did not want Amar Singh to create more confusion between Anil and the Congress leaders," says a family source.

Mukesh’s reason for meeting Sonia and PM Manmohan Singh was to initiate a damage control exercise. Given that there were serious charges against Reliance Infocomm, his brainchild, of hoodwinking BSNL and MTNL by re-routing international calls as local ones to avoid paying interconnect tariffs, Mukesh had to prevent the situation from spinning out of control. He had to do the same with a long-time family friend—Chidambaram.

Ever since this tussle became public, Anil was trying to convince the finance ministry to investigate alleged wrong-doings in the Reliance group. It was Anil who leaked information about how money may have been siphoned off from the flagship Reliance Industries Ltd (RIL) to privately held firms and how Reliance Infocomm’s "receivables" have been hidden from RIL’s—and its shareholders’—eyes although RIL owns a substantial chunk in the telecom venture. If nothing else, Anil hoped that action would be taken against Jain, whom he holds responsible for the differences with his elder brother. In the past, Anil has referred to Jain as the "Shakuni" in this corporate Mahabharata. However, Jain says he has nothing against Anil. "I love him as a person and respect him as the part-owner. Reports that I called him a chaprasi are wrong. I wouldn’t even call my peon by that term," says Jain.

There was pressure on Chidambaram to act, both from politicians cutting across parties and bureaucrats. At least to start a process to put the group on the backfoot. And it was up to Mukesh to prevent any action against the group.

An indicator of this political power play was evident from the manner in which the two camps reacted to Chidambaram’s January 7 statement. While admitting that he meets the two brothers "from time to time," he said he’s advised them to solve their problems within the confines of "the four walls of their house in Sea Wind." Even the FM is denying there’s any agreement between the two brothers to divide the Reliance spoils, the Mukesh camp maintained. Mukesh’s contention was that if there was any deal to divide the group, as was then being claimed by Anil (see Outlook, There is no deal, January 24), why would the FM still talk of advising the brothers to resolve the crisis?

Anil’s aides weren’t impressed. "What else do you expect the FM to say? Do you really expect him to admit there’s a deal? The fact that he’s making a public statement on the issue for the first time proves that something is in the offing, that an in-principle agreement has been reached," said one of them. Another added there was another significance to the FM’s statement. The minister added that the government regulators can interfere, but only if there’s a need to do so. "That’s an implicit threat. Resolve, or else, the government will act in case the fight drags on."

For Anil’s camp, such a positive attitude is critical as their leader is fighting a do-or-die battle. Mukesh is firmly in control of the Rs 1,00,000-crore empire; it’s Anil who has to force his elder brother to split the family wealth and businesses in a "fair and equitable" manner. So, one can also see Anil making those trips to meet the company affairs minister, P.C. Gupta, in Delhi, or the sebi chairman, G.N. Bajpai, in Mumbai. Gupta is important because his ministry can investigate the matrix of investment firms through which Mukesh has transferred control of the family stake in RIL to himself. If that happens, Mukesh may find it difficult to explain how he claims to control some of these investment firms now, although the Ambanis had denied any links with them in the mid-’90s during the switching shares investigations. And Bajpai’s role could have been crucial as Anil tried to block RIL’s buyback scheme and also alleged that the RIL scrip is being manipulated by interested parties.

Unfortunately for Anil, none of the government departments have heeded his accusations. The parallel political posturing by the two sides may have gone in Mukesh’s favour. But that may not be a permanent situation. If this battle drags on—and all indicators point in that direction—Mukesh may find himself in the hot seat. And much of his time may be wasted in deflecting political missiles, apart from the corporate and financial salvos hurled by his younger brother.

Unless, of course, the two brothers are serious about their recent statements that they are willing to talk to each other and settle the dispute.