Rivalries are common in every field which operates on competition. The rivalries in sports, cinema, and politics get a lot of media attention but business rivalries are less fortunate/unfortunate with respect to media coverage. The reasons behind this is business rivalries make less juicy stories and partially because competition/rivalries are seen as part of business operations. There are/have been many business rivalries in the country and Reliance being country’s largest corporate house was at the forefront on many of these. When it entered in textile business with Vimal brand, Nusli Wadia led Bombay dyeing and Kapal Mehra led Orkay Silk Mills Limited were its main rivals.
The united Reliance, led by Ambani brothers, entered in telecommunication business in early 2000s and there Sunil Mittal led Airtel was its main rival. But one rivalry got least media attention before Essar leaks was Reliance’s rivalry with Ruia family led Essar group which has been going on since last two decades. Essar Company was involved in phone tapping of high profile politicians (including PM office), senior bureaucrats, top bankers and rival businessmen. The Essar leaks include e-mails, office memos, telephone conversations and other records, these leaks show politician-corporate-bureaucrat nexus in previous governments.
Essar Company led Ruia brothers (Shashi Ruia – Chairman, and Ravi Ruia – Vice Chairman) tapped the high level decision making conversations to know about important decisions and probably even to blackmail these people. It tapped the phones of Ambani family (Mukesh Ambani, Anil Ambani, Nita Ambani) to know about their business deals. Reliance industries and Essar group entered in petroleum and petrochemical business at around same time. So, the rivalry was obvious. Both started operations in Gujarat but Ruias found security clearances hard to come by while Reliance moved on. As a result of this, Essar’s exploration projects got caught in litigation while Reliance went on to set up one of the largest refineries in the world in Jamnagar, Gujarat. Both companies still compete in exploration and in oil marketing but Reliance is definitely many times bigger than Essar.
The next rivalry front was telecommunication business. The entry of united Reliance affected Airtel most but it was also competing with Essar which was in GSM services while Reliance Infocomm was in CDMA business. However, Airtel came as a winner in this because first Mukesh Ambani had to handover telecom operations to younger brother Anil Ambani (it could not compete for long in the market under Anil Ambani’s tutelage and now plans to sell operations to Mukesh led Jio)and Essar sold most of the telecom operations due to losses. But Mukesh Ambani’s part of Reliance is back in the market with highly successful Jio.
The only business where Ruia’s could hold for long is steel operations. But this one too is not in a solid shape due to Insolvency and Bankruptcy resolution. Essar steel had taken loans from private and public sector banks which it was unable to pay. So, RBI referred the company to IBC board for resolution proceedings. The promoters of Essar, Ruia brothers wanted to bid for the company in association with a Russian company but the bid was not considered due to Section 29A of the IBC which held promoters of the company from making bids under IBC process. So, in conclusion Ruia brothers have lost the rivalry to Reliance for all practical purposes. Ruia brothers and Ambani brothers had the same heft when they started but Mukesh Ambani edged out Ruia brothers as well as his own brother Anil Ambani in the competition.
Get real time updates about our posts directly on your device