Written By Shubham Gupta
Did you know that Anil Ambani was the sixth richest man in the world with a reported net worth of US$42 billion? And why did he file for bankruptcy? This business rivalry and so-called feud emerged soon after the stupefying death of Padma Vibhushan awardee Dhirubhai Ambani. Since he died without a will, serious outcomes were due. The colossal amount of wealth and hefty corporate holdings might be the cause, the brothers shared a close bond before the unexpected demise. Evidently, the brothers weren’t ready for this, they had bigger plans for the future ahead.
Their mother Smt. Kokilaben Ambani stepped in and managed a truce between the brothers by carefully dividing the holdings amongst them. Mukesh, the elder one received control of oil, refining, gas, petrochemicals and manufacturing part of the estate while the younger one, Anil Ambani received telecoms, electricity and financial services. After the division, Anil had big plans for his telecom business. He wanted to become the biggest player in the telecom industry, this emerging sector was about to explode with innovations and he wasn’t equipped for it.
Reliance communications couldn’t keep up with the advancement and with poor execution, hence debt piled up and RCom was forced into bankruptcy. Soon after Mukesh entered telecom, RCom was out of the pool. A complicated web of lawsuits and debt-ridden companies led Anil Ambani’s fall from riches to rags. While this was happening Mukesh Ambani launched Jio and with aggressive marketing and business tactics his market share increased tremendously. Mukesh’s business skills and proper execution helped him to reach heights and become the richest Asian in no time.
With successful schemes, Mukesh became friends with the biggest names in the entrepreneurial world. While Anil was facing lawsuits Mukesh was in talks with investors for Jio. With big names like Facebook,
Google, Qualcomm and others investing around Rs.1.52 lakh crores in Jio was an astronomical event. Anil was losing the suits and he realized that he has to pay up, he sold his major assets to meet the amounts. In 2018, the Reliance ADA group’s total debt stood at Rs.1.72 lakh crores and the group could not pay. In the same year, Anil also became a part of the infamous Rafale controversy with Government of India, an aircraft deal worth Rs.58,000 crore with Dassault. In 2019, following the order of the Hon'ble Supreme Court of India, Anil had the option to either pay the debt or face jail. At the last minute, Mukesh bailed Anil out by leasing $80 million to him in the Ericsson case. In February 2020, Anil Ambani claimed bankruptcy in front of the UK court in the suit against 3 Chinese banks.
Improper execution, poor planning and inappropriate timing were the major causes for the fall of the 6th richest man in the world (in 2008). Anil’s ADAG was over and could not cope up with changes and advancements in the sector whereas Mukesh knew how to tackle the issue and overcome the hurdles. Recently the Reliance Industries Limited (RIL) declared itself as net debt-free, a big step up for a corporate firm. Anil Ambani’s tale of woe was caused because of its piled-up debt. In the end, the elder brother came through and entered the top 10 richest persons in the world.