Read full text of emails from Anil, Mukesh

My dear fellow colleagues

I am personally saddened, like all of you, at the developments of the last 2 weeks, and I thought I would share with you some of my feelings.

As already communicated, I will not comment on any issues at this stage, and may do so only at an appropriate time, if necessary.

I completed my MBA from Wharton on 12th December 1982, and was back with my parents in Bombay the very next day. When I reached Bombay, my father, and our beloved founder, Dhirubhai Ambani, said to me, “Good! This evening you take the flight to Ahmedabad and start working at Naroda (where our textiles plants are located)”.

And so it was. Like a large number of you, I joined Reliance Industries Ltd.

(RIL) in December 1982, as a young management trainee fresh from completing MBA, in the founding business of our company, textiles.

Today, RIL is amongst the world’s top 200 companies, with cash profits of over Rs. 10,000 crore, but back then, RIL’s size was modest, to say the least – a net profit of less than Rs. 50 crore! For more than 20 years, Mukesh and I had the unique opportunity to work with Dhirubhai Ambani, and, under his training and leadership, to be co-creators in this glorious task of building RIL into one of the world’s most admired and successful companies.

It has been a journey marked by successive milestones of togetherness. We became Executive Directors, Joint Managing Directors and Managing Directors at the same time.

I remember, in 1977, on one of the occasions when Mukesh and I were jointly honoured as “Businessmen of the Year,” I said, “We are not inheritors. We have built this company along with our father.” Mukesh concurred, “We are his (Dhirubhai Ambani’s) partners. It has almost been like a joint venture.”

These successes have, of course, been possible only because we have been privileged to enjoy your unstinted support, commitment and devotion.

In 2002-03, upon our beloved Dhirubhai leaving for his heavenly abode, I had the privilege to propose Mukesh’s name as Chairman and Managing Director of RIL, and I received his support to be appointed as Vice-Chairman and Managing Director.

At times like the present, it is useful for each one of us to remember the teachings and learnings of the greatest guru of our times, the father of the Indian capital markets, and the man who have all of himself, his love and his affection to us -Dhirubhai.

Dhirubhai never had any management education. But his teachings were remarkable. In a candid conversation the day I started work at Reliance, he said to me, “You have a choice – you can either demand respect, or command respect. Nothing will please me more if you command respect.”

Dhirubhai had little time for niceties. He was always direct and to the point, his messages carried an earthy wisdom. If we tried to spin complex management jargon, he would say, “Just watch out for the 3Cs – chamchas, chelas, and cronies!”

Dhirubhai was a karmayogi, never willing to rest on his achievements. His underlying philosophy: “India is a land of great opportunity. If you can dream it, you can do it. Our dreams have to be bigger. Our ambitions higher. Our commitment deeper. And our efforts greater. This is my dream for Reliance, and for India.”

Drawing inspiration from Dhirubhai Ambani’s extraordinary life and achievements, I believe that life is a mission, and not just a career.

My own core principles are alignment and empowerment, trust and trustworthiness.

I believe in the development of all four dimensions of human personality – physical, mental, emotional and spiritual.

I believe in, to paraphrase the father of our nation, Mahatma Gandhi:

Wealth, only with Work

Knowledge, only with Character

Business, only with Morality

Over the last week, I have visited our holy and revered temples at Shreenathji and Tirupati Balaji, and prayed for peace and tranquility for all of us, and for courage to preserve and enhance the glorious legacy of our beloved Dhirubhai Ambani.

I am confident of your support to Mukesh and to me, and to the entire organisation, and I look forward to receiving your valuable inputs and guidance at ada@ril.com

Anil D. Ambani

Vice-Chairman and Managing Director

Anil Ambani
Dear Members of the Reliance Energy family

Last Thursday, six directors of Reliance Energy tendered their resignations to the Board. This development, widely commented upon in the media, has left all of you with a sense of anguish and uncertainty. I fully understand and appreciate these concerns.

The Board of Directors of Reliance Energy is meeting, in the next few days, to consider these resignations. In the meanwhile, I have requested each of the six Directors to continue to serve the company, and to carry out their assigned roles and responsibilities, as before.

In January 2003, when BSES became a part of the Reliance group, it inherited the legacy of our great and visionary founder – my father, Dhirubhai Ambani – a legacy of aspirations, values and beliefs that helped him to create, in his lifetime, India’s largest private sector enterprise.

It was Dhirubhai Ambani’s foresight that visualized the potential of the power sector in India, as early as the 1980s. It was in furtherance of that vision that Reliance acquired a stake in BSES in the late 80s, and gradually increased its shareholding over the next decade.

BSES became a part of the Reliance group on 18th January 2003, about 6 months after Dhirubhai Ambani left for his heavenly abode. It will be a lasting regret for all of us that he did not live to see that day.

With Reliance Industries Ltd. (RIL) acquiring the controlling stake in BSES, it was my honor to be nominated by the RIL Board as a Director on the Board of BSES.

Following this, the BSES Board elected me as Chairman and Managing Director.

This decision was unanimously approved by the shareholders of the company at their general body meeting on 15th February 2003.

In February 2004, BSES was renamed Reliance Energy, and achieved the proud distinction of being “A Dhirubhai Ambani Enterprise.”

In the brief period of about 22 months that I have had the privilege of working with all of you, we have strived ceaselessly to embrace Dhirubhai Ambani’s dream of transforming BSES, now Reliance Energy, into a beacon of excellence.

I have always had the highest respect for you, the more than 25,000 professionals in the Reliance Energy team across various companies; and I consider it a privilege to count each one of you amongst my colleagues.

Like most of you, I too have no personal shareholding in Reliance Energy. I am here as a professional to serve the interests of all our stakeholders. For me, professionalism is a value system, a state of mind, and above all, a culture of respect for all.

Reliance, Dhirubhai Ambani would often say, has been built on the foundation of relationship and trust. We have always endeavored, as an organization, to exemplify that principle in all our actions.

In our short journey of under 2 years, we have achieved growth, with profitability.

The market capitalization of Reliance Energy has multiplied 3 times from Rs. 3,000 crore to over Rs. 10,000 crore; the profits have more than doubled from Rs. 162 crore to Rs. 367 crore; and the net worth has gone up nearly 3 times from less than Rs. 2,500 crore to Rs. 6,200 crore.

Today, Reliance Energy is India’s most valuable power sector company. For the last 2 years, it has ranked amongst the top 3 best performing Sensex scrips.

Reliance Energy is owned approx. 50% by Reliance Industries (directly and indirectly), 21% by domestic institutional investors, 21% by foreign institutional investors, and the balance 8% by nearly 1,00,000 retail investors.

We have created tremendous value for each of them.

Our greatest strength is our ability to work together as a team.

In all our endeavors, we must always keep uppermost in our minds the best interests of our millions of customers, and deliver the highest standards of quality, reliability, competitiveness, and customer care to them.

The opportunities, and the challenges, in the power sector are enormous.

I am confident that, together, we – each one of us – will work with commitment, dedication and devotion, to realize the vision and dreams of our beloved founder, Dhirubhai Ambani.

It will be of great support to me to receive your valued inputs and comments, at ada@rel.co.in.

Anil D. Ambani.

Mukesh Ambani

“My remarks were torn out of context”, clarifies Mukesh Ambani

“Dhirubhai Ambani has settled all ownership issues pertaining to Reliance within his lifetime.”

November 22, 2004: Mr. Mukesh D Ambani, Chairman, Reliance Industries Ltd., has issued the following statement:

On my return last evening from the US, I was shocked to find that my response to a question pertaining to the way our businesses are going to go in the future has been torn out of context. Obviously, it was an attempt to build a sensational story around the phrase “ownership issues” leading to a spate of speculations and misrepresentation. I am sensitive to the concerns that would have naturally arisen in the minds of our shareholders, various stakeholders and numerous well-wishers at the media blitz during the last few days. It is necessary to remove confusion caused by deliberate misinterpretation or genuine misunderstanding. Therefore, I would like to set the record straight.

As I was leaving a function, a TV journalist said that “there have been a lot of rumours about the Reliance Group and the way the businesses are going to go in the future.” In response I made two points, namely, that the question itself, does not recognise that “Reliance is one of the strongest, professionally managed company”, and that “there are other issues, which are ownership issues, those are in the private domain.” This question-answer context makes it clear that I was responding to the query about the future businesses.

It is well known that in the process of its growth and expansion, Reliance is engaged in diversification, acquisition of running businesses and creation of new assets. In such a rapid growth phase all big companies have to deal with several issues concerning corporate ownership of future initiatives. Reliance is no exception. I will like to restate that all such ownership issues are in the private domain. Placed in the context of the question put to me, it is obvious that my reply has nothing to do with the family ownership in Reliance.

I will also like to take this opportunity to strongly deplore some totally unjustified and tendentious comments in a section of the media about our father Shri Dhirubhai Ambani.

Reliance is an eloquent testimony of Dhirubhai’s farsighted vision, unflinching dynamism, and unparalleled wisdom. In keeping with the worldwide trend of transformation of family owned businesses, Dhirubhai took, within his lifetime, all necessary steps to separate ownership from management and made Reliance a world-class professionally managed company. With his extraordinary foresight, he has also settled all ownership issues pertaining to Reliance within his lifetime.

I wish to assure all stakeholders that I am committed to uphold the steps taken by him and that the foundation of Reliance is and will remain very very strong I hope all speculation on this issue will come to rest with this clarification.

Mukesh Ambani

Dear Colleagues,

Certain statements made by me, in response to a question on the way our businesses are heading in the future, have been distorted out of context, leading to a flurry of speculative and misrepresentative stories in the media. These stories have also gone to the extent of casting aspersions on the legacy of our Founder Chairman as well as on the professional management of our company.

While I have issued a clarification by way of a press statement today, which I am sure you have gone through I thought I must address all employees of Reliance through this communication, in order to present the correct perspectives:

First of all, there is no question of any effect on the integrity of Reliance. Reliance continues and will continue to grow from strength to strength in several initiatives in the energy value chain as well as new economy businesses. Reliance’s commitment to break new grounds in its quest for global leadership in all major initiatives is unambiguous and resolute.

Secondly, our Founder Chairman, Shri Dhirubhai Ambani had taken all necessary steps to separate ownership from management and has settled all of them within his lifetime. There is no ambiguity in his legacy that the Chairman and Managing Director is the final authority on all matters concerning Reliance.

Thirdly, the professional resource base of Reliance is one of the strongest in the world, both in terms of diversity of disciplines as well as depth in each discipline. Had it not been for the professional strength, Reliance could not have emerged as a USD 23 billion (Rs 100,000 crore) enterprise in a span of just 27 years. Reliance has always believed in building business around people and this fundamental tenet of Reliance’s evolution is timeless. No comment from any quarter of media or society can take away the performance that the 80,000 strong employees of Reliance have delivered and won worldwide acclaim.

The best way, in which such aspersions on professional management of Reliance can be addressed, is through renewed efforts to achieve the goals that we have set out for our company.

Finally, in the evolution of Reliance, there have been some incidences of this type, where the organisation has been subject to speculation, sensationalism and misrepresentation. Each time we have faced the challenge head on and have emerged stronger and more resolute than ever before.

I would like to request each one of you to go beyond issues that are distorted out of context and continue to work diligently and purposefully as you have always done before.

With best wishes,

Sincerely,

Mukesh Ambani