When RAW wanted to investigate Reliance and Ambani!

Imagine a broke Ambani (ahem-Anil-ahem). Hard to believe, but this guy’s net worth as of March 2022 is legit zero! But what could Dhirubhai Ambani’s infamous prodigy have done to soil the legacy of the billionaire title? (Hint: He dealt with China ka maal.) Hold tight, for it’s a tale that won’t pass LinkedIn’s eligibility criteria because it goes from riches to rags to bankruptcy. Coping from a bitter fight with his brother Mukesh after Dhirubhai’s death, the “could be” fortunate Anil became the Chairman of Reliance ADAG (Anil Dhirubhai Ambani Group) in 2006.

A few good days followed, making him the sixth richest man in the world. However, all of this went down Antilia’s “must be” beautiful drainage system soon after. 

While the story's conclusion is sorted, let’s now delve into the juicier bit. 

‘Huawei’ kya tha?

Huawei ye tha that during his stewardship of the Reliance ADA Group, Anil Ambani sought to buy telecom hardware from Chinese Telecom makers, Huawei and ZTE Corporation. At this point, the Research and Analysis Wing (RAW) cautioned the Department of Telecommunications while dealing with Huawei, as the company was said to have links with the Chinese People’s Liberation Army (PLA) and the Chinese Ministry of State Security. 

The founder of Huawei Ren Zhangfei served in the PLA, and that connection stands out foremost in all its business dealings. It is also believed that Huawei is used by the People's Liberation Army of China to carry out intelligence gathering and to carry out cyber espionage, a persistent accusation that has hampered its dealings with major countries around the world.

Huawei has since been accused by many governments, including the Australian and U.S governments of trying to obtain a back door entry for the Chinese.

Sadly, Anil ignored all the red flags like a typical Gen Z teen and took the deal! Huawei and ZTE Corporation used their influence to wrangle concessional loans from the three Chinese banks. But guess what, China ka maal is nobody’s sagga. Anil had to borrow these loans in personal guarantee to facilitate Reliance Communications' purchase of US$ 600 million of Telecom equipment from these companies. 

Hey Anil, if only you could RAW-ger that…

RAW didn’t support Anil’s move because it had long been sceptical of Huawei. While Indian Telecom providers such as Bharti, Idea and Tata sourced their equipment and dongles from Huawei, RAW thought:

After all, global firms like Huawei, which operate in the national and international space, are not strictly motivated by commercial and economic reasons. 🤷‍♀️ Though they are ostensibly private, they could act as arms of the Chinese Communist Party, to which the Chinese state apparatus is subordinate. And what is the government most suspicious about when it comes to China?

Let’s dissect the thought behind RAW’s borderline sinophobia. It is commonly believed that Chinese technology giants are not private in the true sense. They are, in fact, puppets of the Chinese Communist Party to propagate its agenda and strategic objectives.

So, imagine, guys, with the multiple connections Huawei had built with prominent organisations like Bharti, Idea and Tata, it was a legit outsider bana insider! (Hey Huawei, THAT’S OUR JOB!)

Now, as per RAW, the Huawei connection was used to penetrate specific sites and exfiltrate data to provide the Chinese authorities with an opening into these sites! So, like an ever so doubtful concerned parent, BSNL cancelled contracts with Huawei for GSM projects in India's Nothern and Eastern zones. And you know what the insane part is? Huawei was the lowest bidder at that time!!! Aakhir kyu, BSNL?

Well, like the creepy observant uncle in an Indian wedding, RAW could sense the reason- SECURITAYYY of the nation’s secrets! (Read on for deets 😏)

Kaisa ye LIST haii? Ajab sa risk hai!

Sorry for putting that song in your head, but I had to. (#SadismRockzz)

So, our Crime Master Gogo, aka. Huawei, recently made it to the highlights for being placed on the Entity List of the US government. Remember the school days when you’d feel embarrassed for being put on the class monitor’s list of chatty students? Increase its severity by 200x, include the US government, and you have the Entity List! An ‘entity’ is basically a company suspected of theft of trade secrets, conspiracy, wire fraud, and obstruction of justice. It is not just the US but many countries that suspect Huawei of being involved in activities contrary to the national policy or the foreign interest policies of a country. The company stands accused of intelligence gathering, industrial espionage, and military activities against western countries. 

Not just that, projects undertaken by Huawei are funded through extensive credit lines and long-duration loans with generous grace periods from the state-owned banks to undercut the competition and penetrate foreign markets. Essentially they act as functional enterprises of the state organisation. ‘Traitor’ and ‘Patriot’ are two sides of the Huawei coin. After all, companies that use Huawei technology give the Chinese access to domestic networks and open the door to potential surveillance by Chinese officials, posing a threat to India’s national security and well-being.

As the oldie-goldies have rightly observed, “gehu ke saath ghun bhi pista hai,” Anil Ambani sank neck deep in Huawei’s foul-play too! The fact that he could get loans from the Chinese banks due to his connection earned him a place on India’s equivalent of the Entity List- the RAW Special List! 

Never a Hero, Now a Zero: Driving Reliance into a Freefall

Not only did he make it to the saddest possible playlist for a born rich person, but Anil also blotched his reputation further by biting off a lot more than he could ever chew (I mean, the loans).

Reliance Communications was set up with CDMA technology which was limited to 2G and 3G. When 4G technology arrived, Anil had to redo the entire network from scratch. He also acquired GTL Infra for 3G technology and an undersea cable network company.

A legit pro-level kangaali and geela aata moment- With no debts paid, the London courts, which had jurisdiction, tried to enforce a personal guarantee. Anil’s defence lawyers pleaded that these were corporate and not personal debts. However, the London courts struck down his plea and ordered him to pay the money. He then declared personal bankruptcy and bid farewell to the debts. (I am NOT inspired. I am NOT inspired. I am NOT inspired.)

This is how the story ends.

Life Lesson: When you eat a popsicle too quickly, you get a brain freeze. But that’s what Anil did! Got too ambitious, expanded too much and too fast and then, hehe. 🥲

Over-reliance on debt financing for capital and the extended leverage of all his group companies led to his not-so-mighty fall. He went from being a billionaire worth US$ 4.2 billion after the division of assets of Reliance Industries to declaring bankruptcy in a short period. Anil’s favourite song lyrics at the time- ‘If we go down, then we go down together.’ 👇

The Reliance ADAG proved to be the biggest destroyer of wealth (shareholder's) in the shortest period. All his actions were larger than life, and Reliance Communications, which accounted for 66% of his net worth, resulting in the scariest financial boo-boo. His foray into the defence sector was also not without problems. His investments in Reliance Naval & Engineering Ltd and Reliance Defense Ltd were also not without controversy. He took over Pipavav port for over ₹7,000 crores which finally went into NCLT proceedings. Reliance Defence is also mired by the Rafael controversy.

Added to Anil’s ever-so-persistent woes were accusations that he was collaborating with the Chinese, which invited additional government scrutiny of his business dealings and engraved his name in RAW’s Special List of not-so-special people.