All The Boss' Men

Inside the Reliance group, he's just AJ. Like the fictional AJ in Blackberry's TV ad, he is also all over the place. He may, at the same time, be negotiating the purchase of family property in Mumbai, finalising office space in Delhi, deciding the schedule for India's first corporate family's holidays. He's the one-man A-team of Mukesh Ambani, chairman, Reliance Industries Ltd (RIL), who's fighting a no-holds-barred business battle with his younger brother, Anil Ambani. As one RIL source comments: "AJ is Mukesh's consummate corporate Man Friday."

Make no mistake about Anand Jain's power and influence. Although he doesn't earn a single paisa as salary from any of Reliance's group companies, he's a director in IPCL and Reliance Infocomm, apart from being Reliance Capital's CEO. Operating from his headquarters at Mumbai's 84-A Mittal Court—he doesn't really sit at Maker Chamber-IV, where Mukesh has his office—AJ is the brain and the final word on all issues related to real estate (whether the family's or group's), investments through privately-held firms (be it to control the family's stake in the flagship cash cow, RIL, or the Ambanis' holdings in other group companies), and the media and image management of Mukesh and his wife, Nita.

"Jain's responsible for Mukesh's new image and his transformation from a publicity-shy businessman to one who's now seen frequently in public. It was AJ who asked Mukesh to don Armani suits, advised him to become the chairman of the board of directors for the Foundation of the International Federation of Red Cross, and decides which publications and TV channels he should speak to," says a Mumbai-based RIL source. Others say AJ was also behind Nita's decisions to open a school and a hospital. "More important, he's not just an advisor, he's an implementer, too. He ensures that things get done and the Boss (as Mukesh is called by the employees) remains satisfied," the source says.

But the key question is: how did AJ become so powerful in the Reliance set-up? And a corollary to this: are there others in Mukesh's camp who wield similar influence? Most importantly, why does Anil Ambani hate them with such vengeance as is evident from the letter he wrote last week while resigning from his posts (as vice-chairman and a director) in IPCL? (He said that he didn't wish to be on the same board as AJ.)

Three decades ago, the Boss and AJ studied together at Mumbai's Hill Grange High School. In 1981, when Mukesh returned from Stanford University, Jain left his family's property and transport businesses in Delhi to join RIL in Mumbai. Initially, AJ helped Dhirubhai Ambani purchase private and official properties. Over the years, he became Mukesh's most trusted man. The story going around is that it was Jain who "cajoled" Mukesh to think about succession and inheritance issues when his younger brother had a son in the early '90s. At that time, Mukesh didn't have any kids.

By the late '90s, Jain became Mukesh's chief friend-advisor-strategist.According to Anil Ambani, he also became the "architect" who helped transfer control of the bulk of the family's stake in RIL—which was held through a matrix of 300-400 investment firms—to Mukesh (The Really Fine Print,(Outlook December 20). With his team of faceless and nameless CAs, AJ transformed the "ownership/control matrix". This gave Mukesh control over RIL and, hence, most of the group firms where the flagship had majority stakes. The move left Anil in the lurch.

Helping Jain in this ownership act was Mukesh's second key advisor and collegemate, Manoj Modi. A director in Reliance Infocomm, Modi is the brawn behind Mukesh's success, ensuring the completion of mega projects the latter is credited for. "Put him on any site and he'll ensure that all deadlines are met.Moreover, he is one of the best negotiators I've seen," says one admiring acquaintance.So, be it the Jamnagar refinery or Reliance Infocomm's telecom infrastructure, Modi ensured their implementation in record time. That's one of the reasons why Mukesh is known as the great builder, one who quietly gets things done and successfully manages mega projects. One of Mumbai's highest taxpayers for years, Modi reportedly bought a term insurance policy of Rs 100 crore, on which he pays an annual premium of Rs 16 crore, from ICICI Prudential in 2003.
 

AJ and Modi were doing their job as per the Boss' instructions. But Anil is convinced that, without the two, Mukesh may not have been able to wrest control over the family's stake in RIL. Anil's camp has also blamed Jain for diverting thousands of crores of rupees from RIL to Reliance Infocomm, the telecom venture which is Mukesh's brainchild, and other entities, owned and/or controlled by the latter. There are more reasons that may have forced Anil to train his guns on AJ and Modi. The first is the fact that AJ's and Modi's relatives have benefited from Reliance. One of the latter's family members is the group's chief technology officer, and sources all hardware and software requirements; another is the group's liaison officer in Gujarat. What's also been established is that the firms owned by AJ's family are both RIL's suppliers and distributors (The Loser Is You, Outlook, December 27) and the group has purchased several dozen flats in a housing society, of which AJ is the president, in Mumbai's Prabhadevi.

"The business links between RIL and my family's firms are minor compared to the latter's annual revenues. Some of these ties were forged because Dhirubhai wished them. The truth about Prabhadevi's housing society is that Reliance got the best deal. I have never done anything to harm Reliance," says Jain. He then becomes aggressive: "You'll be surprised if I tell you how many people have got jobs in the group because of pressure from Anil and his political friends." He calms down and says, "But we'll not talk about that as we're not in that dirty game."

But Anil is certain that Mukesh's advisors have belittled him in recent times. Several papers have reported how AJ and MM have said they can throw Anil out of RIL's board and "put him on the street". There's a story about AJ's reaction when a journalist asked him about Anil's letter asking for an early RIL board meeting. "Koi bhi chaprasi chitthi likhega toh board meeting kar lenge kya (If any peon writes a letter, will we call a board meeting?)," Jain reportedly said. Although Jain denied the statement, the incident left Anil fuming. Obviously, he decided to get even with these guys.

Similarly, Anil can never miss a chance to get back at another of Mukesh's advisors, Sandeep Tandon, former deputy director, Enforcement Directorate.Tandon was part of the ED's team which, in the 1980s, investigated the links between the Ambanis and dozens of shell firms based in tax havens like the Isle of Man.In 1994, he took premature retirement and joined the Ambanis as group president (taxation), at an annual salary of around Rs 1 crore.Anil's grouse against Tandon is in his belief that he was behind the FERA raids against his then-would-be wife Tina and her parents in 1991.This was after Anil told his family about his intention to marry the former actress, which was opposed by Dhirubhai.

Completing Anil's hate list are the two Meswani brothers, Nikhil and Hital. The sons of Dhirubhai's first cousin, the late Rasikbhai Meswani, they were inducted into RIL's board after their father died in the mid-1980s. Nikhil came aboard in 1986 at the age of 21, and Hital in 1995 when he was 26. The reason: Rasikbhai was Dhirubhai's true partner and looked after RIL's affairs in Delhi since the late 1970s, while Dhirubhai focused on Mumbai and Ahmedabad.Dhirubhai felt he should take care of the two nephews, even though they were quite young.

Yet again, one can't blame the Meswanis for being in Anil's bad books. It's Anil's belief—and there's no proof to back his claims —that the Meswanis' stake in RIL is higher than his. Going by what sources told Outlook, the two Ambani brothers have a personal holding of around 2.5 per cent each in RIL, with their mother Kokilaben owning about 18 lakh shares. Apart from this, the promoters control 7.5 per cent through the Petroleum Trust and 34.04 per cent owned by the investment firms. However, Anil thinks Mukesh has transferred 7 per cent of RIL shares to the Meswanis. When we asked Nikhil, he said, "Why don't you check the public register and see if our names figure there?" Other RIL sources said the Meswanis don't have any shares in their own names, or in their family members' names. Still, Anil has been told that their ownership is indirectly through privately-owned investment firms that form a part of the overall matrix.

Anil Ambani's assaults on his elder brother have shifted gears. From targeting Mukesh directly to going for the men around the Boss...the men the Boss trusts more than his own brother.