Downfall of Anil Ambani : Quick Look | $42 billion net worth- Riches to Rags
Anil Ambani- Riches to Rags
We have seen hundreds of movies showing people stories of rags to riches but the story of riches to rags is quite new. Anil Ambani who was born to Dhirubhai Ambani, a self-made billionaire story is one of a kind. After the death of Dhirubhai Ambani in 2002, everything was going fine between two billionaire brothers- Anil & Mukesh Ambani. After few years into business there was rift between two brothers which led to demerger of Reliance Industries. Anil received parts of Reliance group with interests in telecommunication sector, entertainment sector, financial services,power, infrastructure sector after the demerger in 2006.
Downfall of Anil Ambani | $42 billion net worth- Riches to Rags
During this period Anil Ambani was well connected in Indian
Politics as he was Rajya Sabha Member (2004-2006) from Uttar Pradesh which gave
him edge in terms of policies and decision making. In 2006 with a net worth of
14.8 billion dollars he was 3rd richest person in India. In 2008,
Reliance Communication (R. Com) launched GSM service in India. He also won the
3G spectrum allocation in 2010 giving him added advantage in Telecommunication
Sector and he also introduced cheaper tariff plan to increase his customer
base.
He entered into an agreement with Ericson for expansion, but this agreement ended because R. Com could not pay the signed amount to them. Business of Reliance ADAG Group was not just expanding in telecom sector, but in power, entertainment, and other sectors also. Reliance power IPO raised 11563 crores in 2008 which was quite an achievement due to ongoing global recession. Reliance power aimed to generate 28200 MW in total. He was continuously taking debt for expansion in power sector and was bidding high when compared to the counterparts like Adani.
He also bought majority stake in Adlabs Film with interests
in Film processing and productions. He also entered joint venture with
Dreamwork for production of film at global level. He was running almost six
listed companies in Indian Market like Reliance power, Reliance Infrastructure,
Reliance capital, Reliance Entertainment, Reliance Home Finance, Reliance
Health with market value amounting to 4 lakh crores in 2008. He was 6th
richest man in the world in 2008 with net worth of 42 billion dollars in 2008.
He was also named in Rafale deal and some media report even suggested that he
was benefitted 8 Billion in this deal.
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Reliance Communication owed lenders 48000 crores as of now
& Reliance ADAG group in total owes 1.72 lakh cores of various Indian banks
& Investors. The plan of expansion in unstructured way led to increase in
debt every day. He was dragged to court by Ericson because of non-payment of
due and he was on the verge of being arrested but his brother came to rescue,
and he paid 463 crores to Ericson. In 2019 market cap of all Reliance ADAG
Group fell to 2361 crores and even he was declared in fraudulent by some of the
bank because he did not invested money in the projects for which he took loan.
He also did some transactions and did not shared the details with auditor PwC.
Reliance ADAG Group is the fastest destroyer of shareholder wealth in the last
100 years with its market capitalization decreasing by almost 90% since its
formation. He also said that he is net worth is zero as of now.
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