In the heart of south Mumbai, in one of its most expensive residential streets, a modern and unusually angular skyscraper towers above the hustle and bustle of the city and the heritage buildings of the area.
The 27-storey home, which boasts three helipads and a health club and is estimated to be worth more than US$1 billion, belongs to the business tycoon Mukesh Ambani, 57, the chairman of the conglomerate Reliance Industries and India’s richest man. The home is the world’s most expensive, according to Forbes, while its owner’s worth is pegged at $23.8bn.
The property, called Antilla, represents the towering success of Mr Ambani, while his younger brother, Anil, 55, lags behind with a worth of $8.4bn. The two started out on what was essentially a level playing field when they inherited the family business after the death in 2002 of their father, Dhirubhai Ambani, the founder of Reliance Industries. Their father started the group as a textiles company, which grew to become one of India’s biggest conglomerates.
A rift developed over the following years between the brothers over their inheritance and the management of the group, and they ended up parting ways and dividing the family business.
In 2005, a demerger of the Reliance empire was approved, brokered by the Ambanis’ mother, with Mukesh getting Reliance Industries, including oil and gas, petrochemicals, and textiles operations, while Anil took over Reliance Infocomm, Reliance Capital and Reliance Energy.
While Mukesh focused on the empire’s more traditional industries and was taking an arguably more measured approach through his strong management ability, Anil was concentrating on the more glamorous and risky media and telecommunications sector.
Recently, though, there has been increasing overlap in their business, with Mukesh in May taking stakes in two of India’s biggest media companies, Network 18 and TV 18, for $690 million. He has also been expanding into telecoms.
“There’s definitely a sense of competition between them,” says Arun Wakhlu, the executive chairman of Pragati Leadership, an institute that offers leadership training. “Mukesh has just taken over Network 18 and that will compete with some of what Anil Ambani is doing. If you map out the businesses that they’re in, there are overlaps.
“That itself is an indicator of the driving motive. Is it wholesome excellence or one-upmanship? I’m not sure. It raises questions about the deeper motives of what is driving the two brothers.”
Family businesses are a prevalent model in India, and the rift between the brothers is a high-profile example of the problems that such set-ups can increasingly face in the modern world, he notes.
“In the past in India, business was something that served life,” Mr Wakhlu says. “Today because of materialistic values, for some people, life has become subservient to business. Business is an end itself. It is growth, which is out of touch with the larger fabric of life. In such a scenario, family disputes, friction, fights, competition, become more common.”
While over the years Anil acquired a reputation as something of a playboy who enjoyed socialising with politicians and Bollywood stars, he has also displayed signs of shrewd financial skills after the value of his share of the empire dwindled. Capitalising on post-election euphoria, he last month raised almost $800m through a share issues for Reliance Communications.
There is also evidence that the relationship between the two brothers has improved markedly over the past couple of years.
Last year, the two brothers signed a $220m deal to share a fibre-optic network, which was their first collaboration since the split in the family conglomerate. This was seen as a sign that tensions had eased somewhat. A few days ago, a report in the business newspaper The Economic Times, said that sources had indicated that Anil and Mukesh were looking at entering into more pacts in the telecom space.
“The questions on most minds in India … was whether Mukesh and Anil would work together, apart or against each other?” writes Hamish McDonald in his book Ambani & Sons.
He points out that each of the brothers has “a hungry ambition more often found in a first-generation entrepreneur, perhaps because they had been involved from very young ages in Dhirubhai’s business life”.
He says that the “brothers’ biggest enemies were each other” as they engaged in public battles.
“Each played a constant games of one-upmanship against the other,” McDonald writes. “When Mukesh bought the Mumbai Indians team in the Indian Premier League, Anil was reported to be studying purchase of an English first division football club such as Newcastle United. The most obvious competition was to see who could lift the share prices of his group’s companies the most and thereby increase his own paper wealth in the global rich lists.”
Analysts say that family businesses in India face major challenges because of internal conflict.
“Indian family businesses form the backbone of the Indian economy, and hence there is a need to extend the lifespan of the family business so that the economy can continue to derive benefit from their contribution,” according to the CII Family Business Network India Chapter.
“As new generations join the family business, it is an enormous challenge to keep the family and business together. Some sacrifice the business to keep the family together, while others sacrifice the family to keep the business. It has been observed that just 13 per cent of family businesses survive until the third generation and only 4 per cent go beyond the third generation and one third of business families disintegrate because of generational conflict.”
Mr Wakhlu says that if the Ambani brothers were to put their differences aside, they could be more successful and bring greater benefits to society, Mr Wakhlu says.
“They would be more successful in a holistic sense if they complete each other rather than compete with each other in business,” he says. “I would really love that the Ambanis grow more wholesomely and that 80 per cent of their wealth is ploughed back into the service of society – better schools and education, health.”
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