Skip to main content

"Economist" shocker: Mukesh Ambani's Reliance is rotten role model, secretive, national embarrassment

By A Representative
The influential British weekly “The Economist”, in its latest issue dated August 2, has sought to trigger hornet’s nest by calling top tycoon Mukesh Ambani’s Reliance Industries Ltd (RIL) a “rotten role model for corporate India”, insisting, “When it comes to governance this secretive and politically powerful private empire is not a national champion but an embarrassment”. The title of the comment itself is enough to raise eye-brows: “An unloved billionaire: Why Mukesh Ambani, India’s richest man, needs to reform his empire.”
Saying that “Reliance is a patriarchy with a lightweight board”, the article insists, “Although a listed firm, it makes payments equivalent to a quarter of its pre-tax profits to related entities, mainly privately held by the Ambani family. Its ultimate ownership and beneficiaries are obscured by a mesh of holding vehicles that India’s securities regulator says it does not fully understand. The regulator accuses the firm of making illegal gains from trading derivatives linked to its own subsidiary’s shares (an accusation Reliance is contesting). Some foreign investors, put off by the lack of transparency, shy away.”
Coming to Reliance’s relationship with the government, the Economist calls it “even more troubling”, especially when “anti-corruption campaigners claim Ambani is the power behind the throne of India’s political leaders”. It adds, “Politicians, officials and regulators say Reliance has unusual clout. Reliance denies these claims. Meanwhile, the national auditor is investigating a telecoms-spectrum auction the firm won.”
The change the way Reliance was being run took place in 2010, believes the powerful weekly, when Ambani bid for Lyondell Basell, a global chemicals giant. “The deal would have both made Reliance a killing and forced it to modernise its governance, but it fell through. Since then the company’s culture has become even more personalised. In June Ambani’s wife joined the board. In July Reliance took control of a big broadcaster, which will provide Ambani with a platform for his views, should he choose to use it that way”, the article declares.
The Economist says, Ambani’s belief that Reliance “does not need to reform” is “wrong for two reasons”. The first reason is that “India’s economy is opening up, and the firms most exposed to global competition—tech giants, for instance—have the world-class governance and open cultures needed to command the trust of counterparties, investors and clients, to attract talent and to foster innovation. Asia’s best multinationals, such as Samsung and Lenovo, have had to make painful reforms to stay competitive.”
As for Reliance, it “operates in the more opaque parts of the economy, such as infrastructure, that are trapped in a time warp of barons and scandals”. But to revive India’s growth rate, “Narendra Modi, the new prime minister, will probably expose these sectors to a blast of competition and investment from abroad. The more open the economy, the more of a liability Reliance’s opacity and bad reputation will become”, the article underlines.
And the second reason is, Indian society is turning against its tycoons. “Independent institutions such as the Supreme Court, the national auditor and the central bank are on the warpath against crony capitalism. The electorate is incensed by corruption. Modi may be beholden to the businessmen who bankrolled him, but the voters want him to tackle cronyism. In this climate, Reliance’s power makes it vulnerable. Already, officials are raising awkward questions about its gasfields”, says the Economist.
Sharply contrasting Mukesh Ambani with Dhirubhai Ambani, his father and founder of RIL, the Economist says, “Whereas Dhirubhai Ambani was mobbed by adoring crowds, Mukesh, protected by gunmen, is criticised on Twitter. Pervasive mistrust is dangerous for any firm.” It gives examples to suggest what may happen: “In the early 20th century Americans demanded that big businesses such as Standard Oil be broken up; today, Mexico’s richest man, Carlos Slim, is under pressure to shrink his empire.”
Pointing towards how Dhirubhai built the RIL, the article says, in the liberalized atmosphere ushered in, in 1991, he “fought his way up from a menial job in Yemen through Mumbai’s heaving tenements to the top of Indian business. Socialist dogma and meddling officials were his foes, charm and cunning his tools. He managed to run rings around the country’s stifling rules. Dhirubhai’s tactics appalled India’s establishment. But he marshalled resources to create industrial facilities of the kind every economy needs, including one of the world’s biggest refineries in Gujarat, his birthplace.”
Advising Ambani “to reform his firm”, the Economist says, he should “simplify its ownership and appoint as directors global heavyweights with reputations to lose who can subject Reliance to scrutiny”, adding, “To avoid conflicts of interest Ambani could merge his private businesses into Reliance, on terms that are fair to minority shareholders.” It wants him to “publish details of Reliance executives’ meetings with politicians and officials”, adding, he should “sell its media assets”, and by doing this “he would lose something in personal and political power but gain more through the opportunity to build a more global and more admired business”.

Comments

TRENDING

Aurangzeb’s last will recorded by his Maulvi: Allah shouldn't make anyone emperor

By Mohan Guruswamy  Aurangzeb’s grave is a simple slab open to the sky lying along the roadside at Khuldabad near Aurangabad. I once stopped by to marvel at the tomb of an Emperor of India whose empire was as large as Ashoka the Great's. It was only post 1857 when Victoria's domain exceeded this. The epitaph reads: "Az tila o nuqreh gar saazand gumbad aghniyaa! Bar mazaar e ghareebaan gumbad e gardun bas ast." (The rich may well construct domes of gold and silver on their graves. For the poor folks like me, the sky is enough to shelter my grave) The modest tomb of Aurangzeb is perhaps the least recognised legacies of the Mughal Emperor who ruled the land for fifty eventful years. He was not a builder having expended his long tenure in war and conquest. Towards the end of his reign and life, he realised the futility of it all. He wrote: "Allah should not make anyone an emperor. The most unfortunate person is he who becomes one." Aurangzeb’s last will was re...

Beyond his riding skill, Karl Umrigar was admired for his radiance, sportsmanship, and affability

By Harsh Thakor*  Karl Umrigar's name remains etched in the annals of Indian horse racing, a testament to a talent tragically cut short. An accident on the racetrack at the tender age of nineteen robbed India of a rider on the cusp of greatness. Had he survived, there's little doubt he would have ascended to international stature, possibly becoming the greatest Indian jockey ever. Even 46 years after his death, his name shines brightly, reminiscent of an inextinguishable star. His cousin, Pesi Shroff, himself blossomed into one of the most celebrated jockeys in Indian horse racing.

PUCL files complaint with SC against Gujarat police, municipal authorities for 'unlawful' demolitions, custodial 'violence'

By A Representative   The People's Union for Civil Liberties (PUCL) has lodged a formal complaint with the Chief Justice of India, urging the Supreme Court to initiate suo-moto contempt proceedings against the police and municipal authorities in Ahmedabad, Gujarat. The complaint alleges that these officials have engaged in unlawful demolitions and custodial violence, in direct violation of a Supreme Court order issued in November 2024.

How the slogan Jai Bhim gained momentum as movement of popularity and revolution

By Dr Kapilendra Das*  India is an incomprehensible plural country loaded with diversities of religions, castes, cultures, languages, dialects, tribes, societies, costumes, etc. The Indians have good manners/etiquette (decent social conduct, gesture, courtesy, politeness) that build healthy relationships and take them ahead to life. In many parts of India, in many situations, and on formal occasions, it is common for people of India to express and exchange respect, greetings, and salutation for which we people usually use words and phrases like- Namaskar, Namaste, Pranam, Ram Ram, Jai Ram ji, Jai Sriram, Good morning, shubha sakal, Radhe Radhe, Jai Bajarangabali, Jai Gopal, Jai Jai, Supravat, Good night, Shuvaratri, Jai Bhole, Salaam walekam, Walekam salaam, Radhaswami, Namo Buddhaya, Jai Bhim, Hello, and so on. A soft attitude always creates strong relationships. A relationship should not depend only on spoken words. They should rely on understanding the unspoken feeling too. So w...

Haven't done a good deed, inner soul is cursing me as sinner: Aurangzeb's last 'will'

Counterview Desk The Tomb of Aurangzeb, the last of the strong Mughal emperors, located in Khuldabad, Aurangabad district, Maharashtra, has this epitaph inscribed on it: "Az tila o nuqreh gar saazand gumbad aghniyaa! Bar mazaar e maa ghareebaan gumbad e gardun bas ast" (the rich may well construct domes of gold and silver on their graves. For the poor folks like me, the sky is enough to shelter my grave).

State Human Rights Commission directs authorities to uphold environmental rights in Vadodara's Vishwamitri River Project

By A Representative  The Gujarat State Human Rights Commission (GSHRC) has ordered state and Vadodara municipal authorities to strictly comply with environmental and human rights safeguards during the Vishwamitri River Rejuvenation Project, stressing that the river’s degradation disproportionately affects marginalized communities and violates citizens’ rights to a healthy environment.  The Commission mandated an immediate halt to ecologically destructive practices, rehabilitation of affected communities, transparent adherence to National Green Tribunal (NGT) orders, and public consultations with experts and residents.   The order follows the Concerned Citizens of Vadodara coalition—environmentalists, ecologists, and urban planners—submitting a detailed letter to authorities, amplifying calls for accountability. The group warned that current plans to “re-section” and “desilt” the river contradict the NGT’s 2021 Vishwamitri River Action Plan, which prioritizes floodpla...

CPM’s evaluation of BJP reflects its political character and its reluctance to take on battle against neo-fascism

By Harsh Thakor*  A controversial debate has emerged in the revolutionary camp regarding the Communist Party of India (Marxist)'s categorization of the Bharatiya Janata Party. Many Communists criticize the CPM’s reluctance to label the BJP as a fascist party and India as a fascist state. Various factors must be considered to arrive at an accurate assessment. Understanding the original meaning and historical development of fascism is essential, as well as analyzing how it manifests in the present global and national context.

How polarization between different ideological trends within the communist movement sharpened in India

By Harsh Thakor*  This article is a rejoinder to A Note on Slogans of “Left Unity,” “Unity of the Communist Revolutionaries” and “Mass Line” by Umair Ahmed, published on the Nazariya blog .

Buddhist communities in Michigan protest for Mahabodhi Temple’s return to Buddhist control

By A Representative   Buddhist communities in Michigan have staged protests demanding the return of the Mahabodhi Vihara in Gaya, Bihar, India, to full Buddhist control. The Mahabodhi Temple, regarded as the holiest pilgrimage site in Buddhism, is currently managed under the Bodhgaya Temple Act of 1949, which grants a majority of control to non-Buddhists.

Vadodara citizens urge authorities to adhere to environmental mandates in Vishwamitri River Rejuvenation Project

By A Representative   A coalition of environmental activists, ecologists, and urban planners in Vadodara has issued an urgent appeal to state and municipal authorities, demanding strict compliance with court-mandated guidelines for the upcoming Vishwamitri River rejuvenation project. Scheduled to commence in March 2025, the initiative aims to mitigate flooding and restore the river, but citizens warn that current plans risk violating National Green Tribunal (NGT) orders and jeopardizing the river’s fragile ecosystem, home to endangered species like crocodiles and Indian Softshell Turtles.