Anil Ambani’s views on busniness and his deal with Relaince Jio

Anil Ambani’s views on busniness and his deal with Relaince Jio

Mumbai: Reliance Communications lead by Anil Ambani is a name known to many since his company was the first one to introduce the fewer charges service for its tele-uses which revolutionized the telecom sector years back is now debt-ridden with massive Rs 43,000-crore debt.

Every successful story soaring high does sometimes see a downfall which is exactly what Anil Ambani and his Rcom is currently going through but Anil’s mother Kokilaben Ambani has enlightened her troubled debt-ridden son saying him “to ensure no lender loses a single rupee”.

It was this golden moment when Anil had decided what his next step will be and speaking to TOI, he said, he has decided to exit the wireless telecom business, “When your mother’s blessings are with you, you don’t require anything else.”

The RCom Chairman had signed a deal with his elder brother Mukesh Ambani on late Dirubhai Ambani’s birth anniversary on December 28.

The deal had Reliance Jio’s four wireless infrastructure assets sold for Rs 23,000 crore while Anil monetizing RCom’s other properties, including real estate, to lower his debts to nearly Rs 6,000 crore.

While he was concluding his meeting Anil said his lenders that he was practicing “moral financing” and that “I owe this money to you morally, rather than legally.”

He said that the company was badly struck with the 2G Scam and that the company’s 120 million subscribers have reportedly fallen to only 14 million subscribers in 2016.

“In that period, we had growth, and with growth came challenges. The industry is well known for the corporate rivalry. The strong became stronger, the weak became weaker. We then had the 2G scam. And now we have a judgment which says there was no scam! Thank you, God. Those were extremely challenging and difficult times — for the company, for the group, for individuals, and for my colleagues, who for no fault of theirs were arrested and put behind bars. And then you come out super-clean.”

Speaking about the 2G scam case where the Chairman was subjected to CBI’s questionings and court hearings he said, “I never had the privilege of meeting CBI officials or visiting the CBI office. But I was there for eight hours. I was interrogated by the CBI. I was unaware what an encounter is. I thought an encounter is what we see in movies. But here I was, just sitting in their office and suddenly the CBI people come in and they bring in (A) Raja (to see the reaction). And I said to him, ‘hello, sir’. Because I had always met him as the minister for telecommunications. I went through that experience of torture, trauma, mental agony, mental stress— these are life-changing experiences. They are not for the ordinary. You have to be tempered like steel.”

“Strangely, you then become a witness for the prosecution, that is the CBI. You go to the CBI court. My wife Tina was also dragged in. But the charmer that she is, Tina answered all questions, and very graciously invited the judge to visit our Kokilaben Ambani hospital, which she leads. (Laughs) I would get calls from people saying you are going to get arrested tomorrow, or you are going to go to jail. But my conscience was clear. We had to go through public scrutiny,” he said. “The things I went through in my life, I never want to go through again. And no one else should undergo the same suffering. Today, I have a better appreciation of life.”

When he was asked about his decision on quitting the wireless telecom which he inherited after the 2005 settlement between the two brothers he said, “Business is not about emotion. Business is about economics. And business is about what is best for all stakeholders,” and that though they are business rivals the relationship he has with his elder brother Mukesh is of “great personal respect and super cordial”.

Recalling the old times he had with his father, Anil recalls how he enlightened his father of the possible market potential in the telecom industry in the early Nineties where a cell phone would have cost Rs 30,000. He says that it was later that his father had the vision to bring down this cell cost less than sending a postcard which could easily be accessible to citizens.

He said the metro circles were already awarded, and their family had bid for the C-category circles and bagged them and that “It was early 2000 when the next auction came up and we created a plan to participate in it, but our plan was shot down by my father.” And that all is history with its launch and the way the business grew.

Anil said he wanted to spread his business beyond India and for which he did made efforts which did not turn out in his favour. He made efforts in acquiring MTN of South Africa which ran into legal battle and then a deal with Zain Teleco, for some reason could not work out for him but has no regrets.

“As part of our growth strategy, we pursued a number of opportunities. I went to Kuwait and met the controlling shareholders of Zain Telecom, the Kharafi family, and we agreed on a $6-billion deal to buy Zain Telecom. Shortly after, I get a call from the Kharafis that they have a competing offer and if I matched it, the deal would be mine. I was wondering why a competing offer? Mr Mittal (Sunil) made an offer of $11 billion, significantly higher than our bid. I have great personal admiration for Sunil, and consider him, in the words of my father, to be a worthy member of the zero-to-hero club. Yet, in a recent interview, Mr Mittal has conceded that, in hindsight, that acquisition was perhaps one of his biggest regrets,” said Anil.

Recalling his opportunity to acquire the Hutchison’s local mobile services business when the Ruias of Essar decided to sell the firm which did not work out either.

He said, “I went to Hong Kong and met the legendary Li Ka-shing and the very brilliant mind, Canning Fok, who agreed for an $11-billion deal. We shook hands at a lunch at Li Kashing’s penthouse and all was done. We also got the financing. Then I get a call from Canning— the Ruias were not agreeable. They wanted to run a bidding process. So there was Reliance, Vodafone and Hindujas. Vodafone’s bid led by Arun Sarin was at $21 billion. It was a deal worth losing. Just think about having more than $15 billion of debt on our balance sheet. God is very kind,” he says.

And then in 2014, Jio had announced launching of its mobile services he recalls, “For two years prior to the Jio launch, we had two options — ya toh bech do, yaa kisi ko khareed lo; either be consolidated or be the consolidator. We initially said we will be the consolidators. So, we announced deals with SSTL (Sistema Shyam Teleservices), Aircel and Brookfield. We also did a spectrumsharing and trading deal with Jio. We were fairly clear about the industry structure — that things are going to change and it will no longer be a 10-12 player market, it’ll be a five player market. But it’s a big enough market — 1.2 billion people. Then came the Jio tsunami. The entire industry was impacted. It was a full-blown crisis for the telecom sector. The RBI issued a note of caution that no banks should lend to telecoms in India. And if Indian banks didn’t lend, you could forget about lending by foreign banks,” he said.

Continuing in an emotional voice he said, “With banks… when one company in a group has problems with them, the entire group comes under a cloud. From the banks’ perspective, it is right. From our perspective, we would look at it and say, ‘look these are separate companies and you need to treat them that way’. The banks were unrelenting, and I supported the banks. 2017 clearly showed me who my friends were. Also, it taught me many lessons on relationships, trust and respect. There were many corporate chameleons.”

“Whether you are a billionaire or a common man, whether there is wealth or no wealth, you take nothing when you leave this world. You have come empty-handed, and are going to leave emptyhanded. My father would tell me, ‘Anil, money is a very funny commodity.’ When you have money, more money comes. And when you have no money, no money comes.”

Since Anil has announced resoltution to pay the lenders RComs’s shares have significantly risen from Rs 16 on BSE as reported on 22 December to Rs 31 on 3 January 2018.

Reliance Group has a total market cap of around Rs 81,300 crore, which is a little more than its combined income of about Rs 80,000 crore (includes only listed companies) and now the new RCom will focus on B2Bs.

When asked did he inherit a raw deal in his family settlement and that is there anything that he would want to rewrite he replied saying, “I did exactly as my mother wanted (on the family settlement). Nothing else prevails. If my mother would have told me to walk out with whatever clothes I was wearing, I would have touched her feet and done exactly that,” he said. “Please remember that my father was a petrol pump operator when he started his career and came with Rs 500 from Yemen, Aden,” he said.

When asked not many can survive tough times and from where does he draw his strength from? He replied, “My parents, my fitness regimen have been the biggest sources of my ability to focus, execute, meditate and dream with my eyes open,” adding that, “As they would say in Bollywood, for me, the journey has just begun. Picture tho abhi baki hai, mere dost!”

He simply laughs it off saying at his current age of 58, he takes inspiration from the fact that Warren Buffett and Rupert Murdoch who have become wealthier after they crossed the age of 60. “I will be turning 60 soon. So, there’s great hope (laughs).”

By the time he ended his media conference he received a call from his friend who suggested him to take royalty from actor Salman Khan. When Anil asked why? He simply replied, “Tiger abhi zinda hai!”, reports TOI.