Reliance: A history of controversy

Reliance Industries Ltd, named by activist-turned-politician Arvind Kejriwal in an expose on Wednesday, isn’t exactly a stranger to controversy. And unlike other exposes by Kejriwal, the controversy surrounding Reliance’s D6 block in the Krishna Godavari basin (KG-D6) has been covered extensively by media (and also with far better clarity than what Kejriwal and his colleague Prashant Bhushan managed during a press briefing). Mint’s own coverage can be found here. (read here)

add_main_imageIndeed, most controversies concerning Reliance Industries have been covered extensively by the media. Most of the early controversies can be found in two excellent pieces of journalism. One, by Paranjoy Guha Thakurta in Seminar magazine, in 2003, details Reliance founder Dhirubhai Ambani’s proximity to politicians, his enmity with Bombay Dyeing’s Nusli Wadia, the exposes by the Indian Express and Arun Shourie (who later started seeing Reliance through friendlier eyes) about illegal imports by the company and overseas share transactions by shell companies, and the botched attempt to acquire Larsen & Toubro. (read here)

Another, by Sandipan Deb (now a Mint columnist) and a few others in Outlook magazine in 1996, addresses other controversies related to fake and switched shares; insider trading; and a nexus with the state-owned Unit Trust of India. (read here)NextMAds

To be sure, allegations of insider trading seem to be a constant through Reliance’s relentless march through the decades. In 2009, India’s stock market regulator started investigating whether companies associated with the promoters had indulged in insider trading by taking short positions in futures of Reliance Petroleum after coming to know that the promoters themselves would sell shares soon. Reliance initially denied the claim, reported by Mint (read here), and a few other newspapers in May 2009 was initially denied by Reliance Industries. It later emerged that Reliance and the stock market regulator were engaged in settling the case through a consent order (where the company chooses to pay a fine but isn’t accused of any wrongdoing). The process seems to be continuing. (read here)

Controversies have also dogged the Reliance group, the name of the entity carved out of the Reliance Industries empire when brothers Anil Ambani and Mukesh Ambani carved out their inheritance in 2004 after a bitter and all-too-public fight. In 2011, Reliance Infrastructure and Reliance Natural Resources, both companies controlled by Anil Ambani reached a settlement with the stock market regulator for alleged violations of foreign investment norms. Later the same year, Reliance Securities, also part of the same group, settled another case with the regulator, this one related to violations of rules regarding brokerages. (read here)

To return to Wednesday’s events, barring the unsubstantiated allegation about former petroleum minister Japial Reddy being removed because he was anti-Reliance, much of what Kejriwal said is ground that has been covered, and extensively so, by the business press.