Corporate rivalries: the bloody wars and the bloodless
December 12, 2000
Jamnadas Moorjani passed away last week. In the eighties, his office in a back lane of Kalbadevi used to be an adda of sorts for journalists who covered the synthetic textile industry and the savage war between Dhirubhai Ambani and Nusli Wadia.
As president of the All-India Crimpers' Association, he led a campaign by independent polyester texturisers against a duty hike on yarn, which was allegedly engineered by the Ambanis. It was natural that he soon became an ally of the Nusli Wadia-Indian Express front.
The affable Moorjani who always had a loud greeting and a fund of information, background and data on the textile industry, was one of the key dramatis personae in the bloody war which debilitated both factions. It was sometime in 1986, when he was leaving his Kalbadevi office, that he was badly injured and nearly lost an arm when a gang armed with long knives attacked him. It was widely speculated that the attack was part of the same vicious fight to the finish. But Moorjani always maintained in later years that no such link had ever been established.
There are several stories about the origin of that Dhirubhai-Nusli feud as well as the Indian Express campaign against Reliance. Some say that it was a war between old money and new money. Nusli Wadia, grandson of Mohammed Ali Jinnah on his mother's side and an impeccable centuries-old Parsi business pedigree on his father's side, was quintessential old money with all the arrogance and easy flamboyance that goes with it.
Dhirubhai's was the amazing rags-to-riches story of the "I am ready to salaam anybody" variety. From a petrol station attendant in Aden to the biggest business house in India - it was a growth marked by guts, innovation and an incredible vision that was governed more by business expediency than by ethical constraints.
Since Reliance has always depended on using the license-permit and taxes and duty structures system to its best advantage, political connections have been a vital component of its business strategy. When the political scenario turned adverse the same set of factors, which helped it grow, also brought it to its knees and is even said to have triggered off Dhirubhai Ambani's stroke in the mid-eighties.
In 1989, the arrest of a bandmaster going by the name Prince Babbaria triggered off high drama with the revelation of a plot to murder Nusli Wadia. A couple of Ambani officials were implicated, but as is typical of several notorious cases in India, this too has come to nothing.
Soon after, the two warring factions called a fragile truce, probably on the realisation that the bloody corporate battle was doing neither of their businesses any good.
Reliance regained its political clout and with Dhirubhai's sons -- Anil and Mukesh -- taking charge of the business, the empire grew exponentially. The Ambanis are not attempting to shed their upstart image and transit from "robber baron" to respectability. More recently, when the Calcutta-based Arun Bajoria threatened a hostile bid on Bombay Dyeing it triggered another step by Wadia and Ambani to bury the past. Wadia's reaction to the Bajoria bid was pure panic; he probably realised that if the Ambanis joined the battle, they could easily take over his flagship company. The Ambanis went out of their way to assure Wadia that they had no hostile designs on his company, and in the process mended a few more fences.
No other corporate war has seen this degree of bloodletting before or since. Things have certainly changed since the days when J R D Tata and G D Birla - were building their own rival empires with completely contrasting styles.
Yet, in the last two decades, the only fight that comes close to the Ambani-Wadia one was Swaraj Paul's attempt to take over H P Nanda's Escorts. It was the first major hostile bid in India, and one that gave this acquisition route a permanent stink. The brazen display of political muscle also exposed how government enforcement bodies and financial institutions would willingly malign and destroy at the instructions of their political masters. Nanda's battle also had a positive fallout, it proved that a determined industrialist can take on the might of the establishment and win.
Apart from Escorts and the Ambani-Wadia examples, other battles have revolved around hostile takeovers, especially the bids of Manu Chhabria. Only Shaw Wallace and Gammon India put up a real fight - both were "professionally managed" companies with owner-like managing directors. Chhabria acquired several companies, bled many of them dry and turned them sick - but of these two celebrated cases, he won Shaw Wallace but lost Gammon India.
The irony is that T Subba Rao, the Gammon managing director, turned to Abhijeet Rajan as a white knight and lost the company to him. It is happening all over again in Gesco Corporation, the Great Eastern Shipping real estate spin-off which faced a hostile takeover from the Delhi-based Dalmia group. The Gesco management preferred to hand over control to a loss-making Mahindra & Mahindra realty company.
Again a decision which smacks of 'people like us' (read old money) versus 'people like them' (new money). To the Sheth-Mulji management of Gesco, giving up control and sharing power with the Mahindras was preferable to losing control through a hostile bid.
Other than these examples, the closest thing to a malignant battle has been the fight between the Chhabria brothers - Manu and Kishor. Otherwise, all other rivalries have been hard but careful battles for market share. Nirma vs Surf or Procter & Gamble vs Hindustan Lever, or even the Indian chapter of the Pepsi-Coke face-off - none of them have sustained fizz or really worked up a lather.
None of this implies that all Indian industrialists are friends - if there is business there have to be business rivalries and accompanying hostilities. The difference is that it is all hidden under a veneer of affability. There are no open attacks but endless sniping at each other through deliberately planted news reports or by using the increasingly ineffectual government machinery to block permissions for new businesses.
There are dirty battles instead of open confrontation. Cloak-and-dagger instead of a showdown and malice without any drama.