Hamish McDonald's latest book on the Ambanis is engrossing fare but, at the core, it is an updated version of the banned 'The Polyester Prince', says Rishi Joshi.
Reams have been written in the print media on Dhirubhai Ambani's legacy, but Hamish McDonald was the first to write a book on it. In the late 1990s, McDonald stirred much controversy with The Polyester Prince, a biography of the founder of the Reliance Industries empire, but the Ambanis stalled publication of the book in India with a litigation scare. The biography had detailed the tycoon's tenacity in overcoming opposition and his deft management of the political environment.
At its core, Ambani & Sons seems to reprint large sections of The Polyester Prince. The narrative covers the Ambani saga after Dhirubhai, in particular the feud between his sons Mukesh and Anil, but if you have read the first book and tracked newspapers and magazines, you can give this one a miss. For the others, it makes for a compelling read.
McDonald's painstaking research throws up rare insights into the fabled business acumen of Dhirubhai. For example, in the late 1970s, when brand value and brand equity were relatively unheard of concepts in India, Dhirubhai invested heavily in promoting Vimal, the Reliance textile brand. Says McDonald: "It had an advertising expenditure of Rs 10 million a year, then unprecedented in India and more than four times that of established textile producers like Bombay Dyeing. And it worked. In 1979, Reliance Textile Industries raised its sales to Rs 1.55 billion, making it the largest textile producer in India."
There is also a gripping narrative, replete with anecdotes, on how Dhirubhai coaxed, cajoled and even arm-twisted the media to further his agenda. "Dhirubhai shared a certain contempt for the journalist… but he recognised how powerful the press could be in moulding the thinking of the public and the politicians," writes McDonald.
But the book could court controversy. This time, the anger may come from the political class rather than the Ambanis - particularly from the Congress. The book documents the immense influence Dhirubhai had over politicians, particularly Indira Gandhi. The senior Ambani, says McDonald, enjoyed "unrivalled influence over government policies" after Indira's return to power in 1980. Rajiv Gandhi, during his stint as Prime Minister, regarded Dhirubhai "… as the epitome of everything that had been wrong with the Licence Raj and the Congress". But, according to McDonald, there was a rapprochement between them in 1986.
The book does make for engrossing fare, if only for a better understanding of how the Nehru and Indira brand of socialism made managing the political environment more important than having a good business plan.
'He was a product of his times'
Hamish Mcdonald comes across as remarkably unassuming, even shy. Edited excerpts from an interview with BT:
On whether the book is a revised version of The Polyester Prince
The new book is basically an updated version of The Polyester Prince with a bit more analysis. So far there have been no red flags from the Ambanis and they have not tried to block the publication of the book. I think we are also living in different times, different eras, which mean different views now. The Ambani brothers have global business connections in a global economy. They are more aware of how businesses are scrutinised outside and know that analysis and criticism are a part and parcel of life.
On Dhirubhai's legacy
He had a dual legacy. On the one hand, he created world-class projects and plants. On the other, he focused on political management and public relations. And you see corporates doing this in several other countries, like South Africa, Australia, Korea and Indonesia. As the size of his business grew, his political clout also increased - particularly with the Congress. This was around the 1979 collapse of the Janata government and formation of a minority government under Charan Singh. Dhirubhai was a key player in organising and orchestrating the political defections that brought about the regime change.
But I would say that the physical legacy is the main legacy of Dhirubhai. The other legacy may have faded. With time Reliance is becoming a more managerial company and more stable. The question is - has it become too managerial and stable to expand?
On Dhirubhai's failures
I would say he made two big mistakes. His enmity with Ramnath Goenka, the publisher of The Indian Express, put him in great difficulties later on. And that was largely because of his arrogant remark to Goenka that every man has his price. His other notable failure was his inability to acquire Larsen & Toubro in the 1980s and 1990s.
On the split between the Ambani siblings
It's good for the core petroleum and refining business. Earlier, cash and funds got diverted to relatively new businesses like telecom and power. Anil, though, won't have the cash and reserves to pump into his new businesses. I would say the split has worked in favour of Mukesh. But during their public battle it was interesting to see how they deployed the battle strategies learnt from their father, earlier reserved for rivals, at each other - like leaking documents and planting stories in the media.
On which brother is a better leader
Mukesh is the commander of the petroleum business and he is in a commanding position. Mukesh can analyse on a macro scale but in businesses where people skills are important, like retail, he has not been that successful. Anil is a bit more mercurial but he appears to be better than Mukesh at marketing. He might do well in the entertainment side of the business. So I would say that the brothers have different strengths.
On whether Dhirubhai would have succeeded in an open economy
In an open economy, with greater competition, he would not have been able to grab large market shares. During the Licence Raj, those who managed to corner the licences had a monopolisitic share of the market and did well. I would say that Dhirubhai was a product of his times.