‘Once bitten twice shy’ goes the adage, and Mukesh Ambani must be keenly aware of it. The Ambani scion, who heads the Reliance Industries Ltd (RIL) empire, has said that there could be a ‘momentous leadership transition’ soon. This is an obvious result of the lessons well learnt from the huge rift between him and his brother Anil Ambani after the death of their father Dhirubhai Ambani, which split the conglomerate into two, said corporate observers.
For weeks now there has been a buzz around leadership and other changes at RIL — a $208-billion conglomerate whose fields of operation include energy, telecom, e-commerce and retail, to name just a few. The group also does extensive philanthropical work, currently overseen by Mukesh’s wife Nita Ambani. Media reports have for long spoken of Ambani putting together succession plans for his three children — Akash, Isha and Anant — to take over his empire.
With a net worth of $90 billion, Ambani is India’s — and Asia’s — richest man, and the 11th richest in the world. RIL is among India’s largest firms in terms of valuation as well as turnover, and the leadership changes are hence keenly watched.
What Mukesh Ambani said
“Achieving big dreams and impossible-looking goals is all about getting the right people and the right leadership,” said Ambani at the Reliance Family Day, an annual event that marks the birth anniversary of Dhirubhai Ambani. “Reliance is now in the process of effecting a momentous leadership transition…from seniors belonging to my generation to the next generation of young leaders.” He did not share details on the transition process; neither did he clarify on whether or not he would continue to hold a post.
Ambani expressed his desire for an ‘accelerated’ succession process that would have the older generation — including himself — easing in the younger generation into top roles. “We should guide them, enable them, encourage them and empower them and sit back and applaud as they perform better than us,” he said.
Observing that India is poised to become one of the top three economies globally, Ambani said RIL should be able to lead the growth as one of the country’s strongest and most reputed MNCs. “I would like the story of Reliance to be told in that book which has no final chapter and one which is continually updated with records of bolder initiatives and more glittering successes and where successive generations create even greater societal value and contribute to India’s growth,” he added.
The third generation of Ambanis
Akash, Isha and Anant Ambani, the children of Mukesh and Nita Ambani, are already well involved in RIL’s telecom, retail and energy businesses. Twins Isha and Akash joined the Reliance Jio Infocomm and Reliance Retail Ventures boards as directors at the age of 24. The two are said to have played key roles in many Reliance projects.
“I have no doubt that Akash, Isha and Anant as the next-gen leaders will lead Reliance to even greater heights. I can see and feel their passion, commitment, and devotion to the cause of Reliance every day. I see in them the same spark and potential that my father had for making a difference in millions of lives and contributing to India’s growth,” said their father.
Isha is married to Anand Piramal from the Piramal family, which also runs a diversified empire. Akash is married to Shloka Mehta, daughter of diamantaire Russell Mehta and Mona Mehta.
Did past row with Anil trigger Mukesh’s decision?
There has been some speculation on why Mukesh Ambani, aged 64 and fairly healthy, is keen on succession and leadership changes at this stage. Most observers say it is because he doesn’t want his children squabbling over control of the empire at a later date.
In 2005, following a much-publicised row, Mukesh and Anil Ambani split the empire built by their father into two. While Mukesh, the elder brother, got the core energy business, Anil got the telecom, financial services and power operations. However, the latter’s businesses collapsed under a huge debt burden, with many of the companies facing liquidation. Subsequently, the billionaire brothers buried the hatchet in 2018.
Other possible reasons
While the harsh lessons from the past might seem the immediate reason for the leadership change plan, market experts also say it could be because of regulatory stipulations. The Securities and Exchange Board of India (SEBI) has set an April 2022 deadline for the top 500 listed companies to separate the positions of chairperson and managing director.
The markets regulator has already extended the timeline for this guideline to be implemented, and is unlikely to do so further. Ambani, who is both Chairman and MD of RIL, may therefore have brought in the transition plan to split his role smoothly.
Further, several Indian family-owned business groups are now putting in place clear succession and leadership plans to bring in the next generation seamlessly. The TVS Group, for instance, has numerous companies across various industries, with intricate cross-holdings. Over the past year, the group has been systematically rationalising the ownership of each firm. Several of its companies are already being run by GenNext.