SEEMA MUSTAFA | 31 JULY, 2018
A PM Modi favourite
The man with the Midas touch, well that Anil Ambani certainly is not. In fact quite the opposite, where all he touches seems to turn into dust with the gold remaining elusive. It was not so long ago that big brother Mukesh Ambani had to bail him out (2017) on the 85th birth anniversary of their father Dhirubhai Ambani by buying Anil Ambani’s wireless assets from his debt-laden Reliance Communications Ltd. And this was after over a decade after their famous 2005 feud that split Reliance Industries with Mukesh Ambani keeping the oil and gas business, and the younger brother walking of with telecoms and power.
Debts are rising for Anil Ambani, with the economic newspapers registering what they call his “exit spree” from 2G services, telecom towers, spectrum, real estate, DTH, Mumbai power distribution. But the new toy for him was defence, a high, as he accompanied Prime Minister Narendra Modi on his foreign tours, and signed contracts with various defence majors including Dassault for a manufacturing facility at Nagpur.
This came a little after PM Modi arrived in France and in a grand gesture announced, "Keeping in mind critical operational necessity of fighter jets in India, I have talked to him(French President Francois Hollande) and requested for 36 Rafale jets in fly-away condition as quickly as possible under government-to-government deal.”
The PM’s direct intervention has, thus, effectively closed the earlier file of 126 aircraft that has been hanging fire between the two sides for three years, and converted the deal into a government-to-government transaction for what is a first for India in its military dealings with France. And as experts here pointed out at the time, the rules of the game have thus, changed completely taking the deal out of the hands of the bureaucrats and the Ministry of Defence and placing it in the hands of the political leadership that could direct the framing of new rules for the project as it moved along.
One of the first casualties insofar as this new agreement was concerned was Hindustan Aeronautics Limited, that has disappeared from the agreement.
And been replaced instead by Anil Ambani, a favourite of Prime Minister Narendra Modi with corporate sources insisting he has pipped his elder brother Mukesh Ambani to the post. His movement upwards in the defence sector has been dramatic to say the least with his Reliance Defence Limited and a cluster of other companies flying forward as the virtual flagship of the government’s Make In India program in the defence sector.
There is nothing small or tentative about Anil Ambani’s entry into the defence sector. He hired known consultants from well known defence corporates like Lockheed Martin, went on to acquire the Pipavav company and shipyard in Gujarat, and then became busy bidding for defence licenses covering a wide expanse of weapons, ships, landing platforms and helicopters.
The government helped. Shortly after the new Rafale deal, the Maharashtra government allotted 289 acres of land in Nagpur to Anil Ambani’s Reliance Aerostructure Ltd. He had himself admitted that the allotment set a record of sorts being quoted in the media as saying, “We started on 16 June 2015 with the first presentation and in less than 10 weeks we got the land. This is a record.”
This land will be home to Dhirubhai Ambani Aerospace Park (DAAP) that will manufacture fixed wing aircraft, aerostructures for commercial transport aircraft and helicopters for both military and commercial use. And for which the foundation stone was laid amidst some fanfare in October 2017 with Maharashtra Chief Minister Devendra Fadnavis, Union Minister for Shipping Nitin Gadkari, French Minister for Armed Forces Florence Parly, Reliance Group Chairman Anil D. Ambani and Dassault Aviation Chairman and CEO Eric Trappier in close attendance.
Along the way, just before the inauguration it was made known to the media that the Dhirubhai Ambani Aerospace Park (DAAP) with a capital investment of Rs. 6,500 crore was in partnership with Dassault Aviation (Rafale) and would be the biggest FDI in the Indian defence sector till date.
Anil Ambani , now in the dock over Rafale, has just released a two page letter he wrote to Congress president Rahul Gandhi last year recalling the close relationship his father Dhirubhai Ambani had with the Congress party. He insisted that the Modi government had no role in the agreement between him and Dassault. And that Dassault entered into a partnership with Reliance Group of its own volition, “ a deal between two corporate private sector entities, and governments had no role to play in this matter.” He further claimed that the joint venture with Dassault Aviation would create jobs and impart valuable training. With a “strong India” being central of course to the agreement.
Anil Ambani is a frequent traveller with Prime Minister Narendra Modi during his visits abroad, being part of the business delegations. The grapevine buzz now places him far ahead of his more successful brother Mukesh Ambani, insofar as political clout is concerned given his proximity to the PM and his fast expanding defence interests. He has been a vocal advocate of the Make in India program and started his journey upwards shortly after being nominated as one of the nine celebrities by the Prime Minister for his Clean India campaign last year. Others included Sachin Tendulkar, Priyanka Chopra.
Ambani has been taking care to respond to PM Modi’s initiatives,including a decision to give up cooking gas subsidies. While he joined a host of industrialists like Anand Mahindra, Gautam Adani and Mukesh Ambani he went a step further by directing his one lakh employees to do the same. This did create a stir as the comparison between the paid employee and the top baron was drawn pretty starkly in sections of the social media. But it placed Anil Ambani firmly in the saddle of favourites.
Anil Ambani has been described by the opposition as one of the major ‘beneficiaries’ of the Rafale deal as he is reported to have the major offset share with Hal no longer visible.He is in debt with the figures varying, but running into thousands of crores. Sources insisted that many of the defence personnel who had joined him have left with the Russians preferring HAL to his company insofar as technological cooperation over a substantive defence deal was concerned. The lack of experience in manufacturing big ticket defence weaponry and machinery is visible and worrying, the sources said.
The Congress of course is not giving up, pasing posters across Mumbai with PM Modi hugging Anil Ambani with mention of the businessman in Parliament as well. The younger brother is again in deep trouble, financially, with the debts mounting rapidly. Relations with the elder brother are perhaps not as openly strained as before but Mumbai insiders insist that the warmth is missing.