Dhirubhai Ambani dies
Vajpayee huddle to assert authority
Mamata on beaten track, CPM on slippery ground
Fineprint first, flight later
Calcutta Weather

Mumbai, July 6: 
Dhirubhai Ambani, chairman of the Reliance group, died tonight after fighting a grim battle for survival for 13 days at Breach Candy Hospital in south Mumbai.

Ambani was admitted to the hospital on June 24 evening after he suffered a stroke and was on life-support system till the end.

The end came at 11.50 pm. The 69-year-old Ambani is survived by wife Kokila, sons Mukesh and Anil and daughters Dipti Salgaocar and Nina Kothari.

The body will be taken to his residence, Sea Winds, at Colaba in south Mumbai. A Reliance spokesman said the body would be kept there from 9 am to 3 pm tomorrow for people to pay homage. The funeral will be held tomorrow at Chandanwadi crematorium at 4.30 pm.

Born to a schoolmaster in Chorwad village in Saurashtra on December 28, 1932, the founder of the Reliance group could not afford higher education.

The odds were heavily stacked against him. What chance did Dhirajlal Hirachand Ambani, a high school-educated spice and yarn trader, have of building a Rs 65,000 crore conglomerate with a shareholder base of over 5 million (the largest in the world) that would become India’s first private sector enterprise to crash into Fortune 500? A zillion to one.

But whatever he may have missed in the hallowed portals of university he learnt while strolling about the souks of Aden where he had gone at the age of 17 as a clerk with A. Besse & Co. Ltd. One of the largest commercial houses in the Red Sea area, the company had the sole distributorship for Shell products in British-administered Aden (Yemen).

Dhirubhai was assigned to the Shell products division of the company and marketed Shell lubricants. Soon, he rose to the post of general marketing manager for Burmah Shell products by the age of 24.

Later in life when the man became a legend, myth merged with fact and it was popularly believed that he had worked in Aden as a petrol pump attendant.

The Aden years gave the young Dhirubhai two insights. First, he observed British Petroleum set up its refinery in Aden, which gave him a deep understanding of the linkages of the petroleum industry. It sparked an ambition that was to lie dormant for almost 40 years before he set up the world’s largest refinery in Jamnagar with a capacity of 27,000 million tonnes.

Second, and perhaps more important, Ambani went down to the souks to watch the Arab, Indian and Jewish traders ply their craft. Soon, like the other Gujarati Banias, he was playing the markets which honed his great skill in later life to lay highrisk bets — and win.

In 1958, he returned to Mumbai and started his first company — Reliance Commercial Corporation, a commodity trading and export house, with an investment of Rs 15,000.

The company, which he launched along with his second cousin Chambaklal Damani, operated out of a one-room office in Masjid Bandar district, shipping spices, nylon, cotton, and viscose textiles to Ethiopia, Somalia and Kenya. But they soon started trading in synthetic yarn through a network of Gujarati contacts in the lucrative trade.

The Ambanis lived in a one-room tenement in a chawl in Buleshwar. Soon, the young Dhirubhai mastered the art of profiting from the Byzantine system of government controls.

He exported spices, and used replenishment licences to import rayon. Later, when rayon began being manufactured in India, he exported rayon and imported nylon. Still later, he exported nylon and imported polyester.

He was always a step ahead of the competition — and always ready to take the big risk that none else would.

By the mid-sixties, he wanted to graduate from the rank of just another trader —profits were high, sometimes as much as 300 per cent, but that didn’t put you in the big league.

Indian industry was then dominated by a handful of families and entrée into the charmed circle was through birth and a complex web of business relationships.

Dhirubhai was the first to dare to dream that he could gatecrash into that esoteric club of top industrialists who may have initially sniffed at this parvenu, but soon had to grudgingly admire his skill at manipulating men and markets.

“Jealousy is a mark of respect,” Ambani was to remark later.

In 1965, he had split with Damani — his partner in Reliance Commercial Corporation — because his cousin had no stomach for the big gambles that he so loved to take. Within a year of the split, he started a textile mill at Naroda, Ahmedabad, with four warp knitting machines and a staff strength of 70.

Dhirubhai has won a lot of labels in his lifetime — some cynical, some adulatory. He has been called the Polyester Prince, a Petrochemical Potentate, but perhaps the most cherished one would be as the man who created India’s equity cult.

The ride into Dalal Street and the hearts of equity investors began in 1977 when he raised Rs 2.8 crore for a then unknown company, Reliance Industries. All through the 1980s, he kept coming back to the capital market with a string of primary issues of innovative instruments like equity warrants.

He also had an uncanny knack for resurrecting and adding sheen to otherwise discredited financial instruments like the convertible debenture. Above all, he had the rare ability to first acquire a large body of shareholders and then keep them loyal and happy, and well rewarded, in good times and bad.

Success spawned rivals and led to ferocious corporate battles — but despite all the dirt that was dredged up on his business deals and his cosy relationships with people in power, he never seemed to end up on the losing side.

By the mid-eighties, he was fighting battles on several fronts — there were court cases, and a raft of allegations about manipulating the government to bend the rules so that he could most profit from it. The air was thick with intrigue, but the charges never stuck, though the suspicions lingered.

His health, meanwhile, was failing. In 1986, he suffered a stroke that paralysed his right side and he was confined to a wheelchair for a while. But he bounced back with evermore grandiose plans.

His myriad business interests, which were now managed by sons Mukesh and Anil, soon straddled areas like petrochemicals, synthetic fibre, fibre intermediates, textiles, oil and gas, financial services, refining and marketing, power, insurance, telecom and infocom.

The simple school teacher’s son soon sat at the head of the country’s largest business house with total revenues of Rs 60,000 crore ($12.5 billion), a cash flow of over Rs 7,000 crore ($1.4 billion), net profit of over Rs 4,500 crore ($950 million) and exports of Rs 9,370 crore ($2 billion). Its total asset base stands at Rs 55,000 crore ($11.5 billion).

In June 1998, he was awarded the Dean’s Medal by The Wharton School, University of Pennsylvania, for setting an outstanding example of leadership — a rare honour for a man who had to give up his studies after school because there wasn’t enough money in the family kitty.

It’s an awesome tale of grit and determination, the stuff legends are made of. Love him or hate him, there’s no denying him his place alongside the two other doyens of Indian industry — G.D. Birla and J.R.D. Tata.

Will there be another like him? Unlikely. But Dhirubhai himself felt that there could be many more like him. He said at one of his AGMs: “If one Dhirubhai can do so much, just think what a thousand Dhirubhais can do for this country. There are easily a thousand Dhirubhais, if not more. I firmly and sincerely believe in this. They are raring to join the race.”


New Delhi, July 6: 
Atal Bihari Vajpayee today held extensive one-to-one meetings with the new finance and foreign ministers in what is being seen as the first attempt to signal that his writ continues to run over a government which has a deputy Prime Minister.    

New Delhi, July 6: 
Mamata Banerjee’s Trinamul Congress today betrayed its lack of options by repeating the threat to launch an agitation against the move to carve up Bengal’s railway zones and stay away from the Union ministry until the drive is suspended.

Her rival, the CPM, too, is in a dilemma and indicated that it does not want to be associated with Mamata’s campaign.

“Do not ask foolish questions,” Bengal chief minister Buddhadeb Bhattacharjee shot back, asked if his party would be with Trinamul in the agitation. His predecessor, Jyoti Basu, threw up his hands in “despair”. “What are these journalists asking?” Basu snapped. “Trinamul Congress is our main adversary in West Bengal.”

Bhattacharjee, who attended the CPM politburo meeting which discussed the railway issue, also met deputy Prime Minister L.K. Advani in Delhi. Advani heard out Bhattacharjee’s appeal to refer the issue to an experts’ panel and said the proposal would be discussed with the Prime Minister.

Bhattacharjee’s public statements echoed Mamata’s opposition to the division of railway zones but CPM sources said in private the party would find it difficult to go full steam ahead with a campaign to block the move.

The CPM’s problem lies in that it does not want to appear “parochial” and “anti-Bihar”. But it also does not want to be seen as indifferent to an issue its state rival wants to capitalise on as was evident from Trinamul’s extended general body meeting in Calcutta this afternoon.

At the meeting, Trinamul decided to launch a vigorous campaign against railway minister Nitish Kumar’s move to bifurcate Eastern Railway and trifurcate South-Eastern Railway and also keep up the pressure on the National Democratic Alliance to make him revoke it.

The agitation will include street-corner meetings, demonstrations and even “rail roko”. The party has also threatened to bring proceedings in the Lok Sabha to a standstill, if the Centre allows Nitish to go ahead.

But Nitish stuck to his guns today, saying in Jaipur that the opposition to the bifurcation was a “political and emotional issue that has no basis, logic or justification”.

Trinamul leader and Calcutta mayor Subrata Mukherjee said the meeting appreciated Mamata’s stand not to join the Cabinet till the problem was sorted out. “Party workers are all praise for the kind of sacrifice she has made to protect Bengal’s interests,” Mukherjee said.

The meeting, attended by most of the party MPs, legislators and councillors, expected Prime Minister Atal Bihari Vajpayee and Advani to take suitable measures to resolve the impasse and maintain national integrity “threatened by the railway minister’s move”.

But Trinamul also betrayed its dilemma by saying it was not closing its options on joining the government. “That option is always open. But Trinamul Congress will consider joining the ministry only if the bifurcation move is kept in abeyance,” Mukherjee said.

Mukherjee said Trinamul was not against Bihar’s development. “We will be happy if the Centre offers assistance to Bihar for its economic development. But we cannot allow it at the cost of Bengal.”


New Delhi, July 6: 
The announcement of deep discounted fares by Indian Airlines and Jet Airways for the silly season — August to October — comes with strings attached. So read the fineprint before you start packing for that dream holiday.

Travellers will be gung-ho over the fare cuts — up to 60 per cent — by the two biggies in the Indian sky that bring air fares in some cases down to levels that match two-tier Rajdhani Express ticket prices. Air Sahara, the smaller third domestic airline, is slated to follow suit.

All tickets will have to be booked at least 21 days in advance. No other discounts — like old age, defence or freedom fighters discounts — can be availed with this scheme. There can be no cancellations and changing the date of travel will be very difficult. As the seats being sold are earmarked, it may be difficult to find those very seats in another flight.

Travel trade normally codes such heavily discounted lean season tickets as “M-class” and in most airlines the bulk of such earmarked tickets are accounted for by middle seats, which full-fare paying passengers normally do not like to fly on.

The good news is that these fares will continue right through the Durga Puja season when people from the east traditionally go out on holidays.

“Our prices will hold till end-October, we want people to travel... after that we will see whether we need to go back to the old prices or sit pretty,” said Indian Airlines commercial director Anil Goel.

Hit by falling seat sales during monsoon, the airlines decided to launch a war not so much against each other but rather on the railways to try prise out passengers who would otherwise not fly. “We want new passengers, not just get the loyalists to fly again,” added Goel.

In a market of depressed demand and overcapacity, these fares are expected to expand the market size and generate fresh revenue for the airlines.

The Delhi-Calcutta special fare will be Rs 2,860 against a current fare of Rs 6,875 one way, while Calcutta-Mumbai will cost just Rs 3,320 against a current fare of Rs 6,855.

Yield per seats will go down but “higher seat factor would mean more total revenue earnings”. Naturally, the new option will cover mostly high-density routes.

However, these fares come with strings attached and if you are one of those who is likely to change mind about travelling arrangements, then this offer is certainly not on.

Though the two airlines have different names for their schemes, the effective discounts work out to the same level. Jet calls its new promotion Everyone Can Fly, to commemorate the first flight in history 100 years ago by the Wright Brothers. Indian Airlines named its scheme Apex fares.

Sahara already has a system of being able to bid for one’s fares and thus being able to fly at a fraction of the real fare. With more freebies being announced with every ticket, it will probably further popularise this scheme.

Air-India steps in

Air-India jumped into the fare game today, announcing that travel on its flight services on certain domestic sectors would be cheaper than both Indian Airlines and Jet Airways.

Air-India managing director J.N. Gogoi said the airlines’ fare depends on that of the national domestic carrier and that if Indian Airlines reduces its fares, “our (Air-India’s) fares also stand automatically reduced”.




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