How's my Luck now?

Reflections, views and descriptions during my stay at IIM Lucknow from July 2004 to March 2006

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Location: India

Thursday, December 09, 2004

The Reliance tussle

I have been following the Ambani viruddh Ambani tussle in Reliance with some interest.

One set of views I have is regarding the personalities of the two brothers, which seem totally different. While Anil Ambani comes across as a more suave, Gita-quoting, ethics-toting person, Mukesh Ambani seems much more brusque and ruthless. The latter resembles Dhirubhai much more than the former (at least it seems that way to me). But it is interesting to see that in all their writings, e-mails and announcements, it is Anil who invokes Dhirubhai's name more frequently, and always in reverential tones. Frankly speaking, it is difficult to associate corporate governance and ethics (invoked in almost every piece that Anil has written) with the Reliance Group. One may argue that Dhirubhai's tactics were a necessary evil in the time of the licence raj, but Reliance is still not free from controversy. Witness the Reliance Infocomm tactics of routing international calls as if they originated within the country. And political closeness with the likes of despicable people of the Samajwadi Party does not help much either.

Another thing that interests me is the complex investment structure and cross-holdings within industrial groups. The complexity of these holdings is very great in Reliance Industries, and it is beginning to become more complicated in Reliance Infocomm. My basic question is: What is the purpose of such complex investment structure? Maybe there are legitimate advantages to it in financial terms which I am not aware of. But as of now, they just seem to me to serve one purpose: obfuscation. Reading about them reminded me of a worldwide programming contest called 'The Obfuscated C code' contest, where the winner is a person who writes the most obfuscated C code to achieve some end, packing as much into every line of code as possible, using the flexible C constructs.

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