The Polyester Prince (15 page)

Much later, Henwood tried to market his services to other Indian businessmen. Dhirubhai became alarmed, and had Henwood followed on his visits to India. To protect his business interests, Henwood consulted a leading firm of lawyers in India.

Over the years 1982 to 1984, Dhirubhai also met problems within the ‘Reliance family’.

In 1982, junior office staff in Bornbay petitioned the Reliance management about low salaries and being obliged to work long hours and on holidays without overtime pay.

Then they attempted to join a trade union, the Mumbai Mazdoor Sabha run by R. J. Mchta. Some 350 were dismissed without notice, ostensibly on grounds of a ‘reorganisation’, while others were transferred to Reliance offices in Gujarat. The dismissed workers said muscle men had beaten up one activist and a deputy personnel manager had waved a pistol at a typist.

In December 1983, Dhirubhai had hosted a special lunch for all his 12 000 factory staff at Naroda to celebrate the wedding of his daughter Dipti to Dattaraj Salgaocar, the heir to a prosperous iron ore mine in Goa. It was a love match-Raj Salgaocar had been staying in the same apartment building in Boinbay’s Altarnount Road as the Ambanis when he met Dipti-but a prestigious one for Dhirubhai, just as he had emerged as a tycoon himself.

The bonhomie at the wedding covered some mixed feelings on the factory floor. The Naroda workforce was seething. Within a few months, the textile hands were agitating for a wage increase, payment of overtime, and removal of contract labour. Dhirubhai effectively nudged aside his elder brother Ramnikbhai from management of Naroda, and put his younger son Anil in charge. In August 1984, the company suspended 160 of its workers, and announced formation of a company union, the Reliance Parivar Pratinidhi Sabha (Reliance Family Representative Union), including 6700 workers and 1800 staff.

‘The concept of unions has no place in our set up,’ the company’s general manager for personnel and administration, H. N. Arora, told a newspaper. ‘We believe in participative management.’

Agitation continued within the plant. On the morning of 28 August, the company announced suddenly that work was stopping, and the plant was closed. Squads of Gujarat state police and police reserves waiting at the gate stormed in and charged the protesters with lathis (long wooden staves) and tear gas.5

Dhirubhai rode out this episode, but with regret. Not only had he lost the earlier affinity with his factory workforce, but arguments between Ramnikbhai Arnbani and Anil had induced Dhirubhai’s elder brother to distance himself from the company’s operations.6

The blazing success as Dhirubhai proceeded to his triumphant general meeting in May 1985 carried some dark shadows. Many of those who opposed him had been crushed in ruthless displays of the state power he could manipulate: the police lathis and tear gas that fell on his own workers, the tariff changes and tax raids that hit his business rivals, or the ignominious transfers given to civil servants who held up his plans.

The opposition parties had been alerted to his connections with the ruling Congress Party and Indira Gandhi’s office. The very resistance met by any query about Reliance only encouraged politicians like Janata’s Madhu Dandavate, the Marxists’ Somnath Chatterjee or the Bharatiya Janata Party’s Jaswant Singh to press harder. Dhirubhai had a growing list of critics, and enemies to feed them questions. It only required a sudden removal of his high-level protection for his complex fast-growth operation to be dangerously exposed.

On 23 November 1985, Bombay’s sensation-seeking weekly tabloid Blitz came out with a cover story that soon had more than the usual crowds browsing at the newsstands.

‘
BIG
3 IN
MAHAPOLYESTER
WAR
,’ shouted the front-page headline.

‘It’s a Mahabharata War, or rather, Mahapolyester War-in Indian big business style,’ began a lengthy report that took up the whole of the front page, and spilled into two full inside pages.

‘There are only Kauravas, no Pandavas, and no Lord Krishna. The reason is that none is without blemish. The fight is neither for inheriting the earth nor the heaven, but for one of the most lucrative industrial markets-that is, polyester filament yarn, where profits soar around Rs 80 to Rs 100 per kg.’

Not only that. Blitz told readers in a front-page subheading: ‘The Mahapolyester War goes beyond the industry to apocryphal stories involving serious political repercussions.

According to New Delhi’s grapevine, the old Pranab-Dhawan-Ambani axis responsible for Reliance’s booming fortunes is currently reorganising its scattered forces with V P Singh, the Finance Minister, as its principal target.’

Pictured as contestants in this dark war without heroes were Dhirubhai, along with two competing textile magnates: Kapal Mehra of Orkay Silk Mills and Nusli Wadia of Bombay Dyeing. Among these Kauravas fighting each other, Reliance (Dhirubhai Arnbani) and Orkay (Kapal Mehra) are the principal combatants, with Bombay Dyeing (Nusli Wadia) on the sidelines. Thanks to Reliance and its vast patronage and money power, Orkay got the wrong end of the sword, with the result that the patriarch of the family spent Diwali in jail after five attempts to ball him out had failed.’

Blitz’s editor, Russy Karanjia, was right that a corporate war was about to spill over into politics. But his article was wrong about the main battle. Kapal Mehra had just spent 15 days in jail over the festival of lights (Diwali) marking the new year in the Hindu calendar. He was facing massive penalties on charges of evading excise and customs duty. Earlier, his son had been abducted near Orkay’s Patalganga factory, beaten up and dumped in a drainage ditch some n-dles away. Mehra was already knocked out of the combat.

In the bigger fight just warming up, Nusli Wadia was Dhirubhai’s opposing gladiator.

And while Wadia was bleeding, Dhirubhai was on the back foot. After his accolades at the Reliance shareholders’ meeting in the Cooperage Football Grounds in May and the oversubscription of the Rs 2.7 billion F series of debentures in June, things had started to go badly wrong for him in the second half of 1985.

But Blitz was correct in painting this fight over a mundane textile and its chemical inputs with the colours of an epic. It went on for years, reached to the highest levels of politics, dragged in some of India’s best talents, sullied some of them and made heroes of others, and caused governments to fall. Far from being a tabloid beat-up, the Great Polyester War was central to Indian politics, for critical years in the 1980s-to the point where one former minister in the central government could state, with only a little exaggeration, that

‘The course of Indian politics is decided by the price of
DMT
[dimethyl terephtbalate]’.’

According to stories put out by Reliance sympathisers over the years, the war began with a snub.

Back in the late 1960s and early 1970s, the social gap between Dhirubhai and Nusli Wadia could not have been much wider for two people in the same industry Dhirubhai was a paan (betel nut) chewing trader roaming from client to client in Pydhonic to sell his polyester and nylon yarns, flashy in personal tastes, and with a small-town Gujarati social background.

In Bombay, Nusli Wadia was Establishment. The Wadia family were Parsi, followers of the ancient Zoroastrian religion in Persia who had fled to the west coast of India in the 10th centuryAD to escape forcible conversion to Islam. In the 18th century, the Wadlas had become shipbuilders to the East India Company in Surat, constructing the famous company sailing ships known as ‘Indiamen’ which carried cargoes of calico, silk, tea, indigo and opium in their capacious holds, and rows of cannon in gun ports along their sides to fight off pirates or force their way into China’s ports.

When British commerce shifted to Bombay, the Wadlas followed and joined India’s first wave of modern industrialisation. In 1879, they set up Bombay Dyeing & Manufacturing Co, which moved from dyeing of cotton yarn into spinning the yarn and then into weaving of cotton textiles. Under Nusli Wadia’s father, Neville Wadia, chairman between 1952 and 1977, the company continued to modernise, and became one of India’s largest textile manufacturers and exporters.

Like many Parsi families, they adopted English ways in speech, dress and social behaviour. Although their agiaries (fire-temples) and towers of silence (grounds for open-air burial) were forbidden to others, the Parsis have long been a cosmopolitan element in Bombay and intermarriage with members of other Indian communities or foreigners was common. Nevillie Wadia had married the daughter of Moharnmad Ali Jinnah, leader of the Muslim League in pre-independence India. Before 1947, Jinnah’s family lived in a big house on Bombay’s Malabar Hill, though Jinnah was to move to the newly created Pakistan of his dreams after the Partition, dying there within a month of its creation.

Nusli Wadia had been born with all the advantages, and had been educated at schools in Britain. Like his father, Nusli held British citizenship and travelled widely. As Dhirubhai was beginning his climb up from the yarn market, Nusli had just returned to join the family business. He was in his mid-twenties-some 12 years younger than Dhirubhai-handsome in an acquiline way, dressed in quiet but classic English fashion, and always cuttingly direct in his impeccable English. He moved around in a foreign sedan between the family’s waterfront mansion and the company’s turn-of-the-century stone office building, Neville House, in the grandly laid out old business district of Bombay, Ballard Estate.

The Parsis, like many colonial clites, went through a crisis of self-esteem when the colonial power went home without them. Their own self-image became one of failure, eccentricity and emasculation. The younger Wadia was the great exception. He was anything but inclined to relax and live off inherited wealth. In 1971, his father wanted to sell off the company to the Calcutta-based Marwari tycoon Rama Prasad Goenka and retire abroad. Nusli Wadia, then 26, enlisted the support of the Tata patriarch J. R. D.

Tata to help in a shareholders’ battle against the sale, and rallied 700 employees in an offer of a staff buy-out of some shares. His father dropped the sale, and after handing the company over to Nusli in 1977 settled in Switzerland.

It was the first of many battles in which Nusli Wadia showed his remarkable fighting capacity when he felt his own vital interests, or those of friends who sought his help, under threat. Wadia was never inclined to take a public stage. He did not join business associations and appear constantly at conferences and seminars like many other big businessmen, or host lavish parties in hotels. He avoided the press. But he developed a wide circle of friends and contacts who came to appreciate his fearless advice. Among them were tycoons many years his senior, like Tata and later the press baron Ramnath Goenka of the Indian llipress.

The Ambani version of the snub is that Wadia simply refused to buy C. Itoh yarn from Dhirubhai, for reasons that are not explained. Another variation is that Wadia kept Dhirubhai cooling his heels in the corridors of Bombay Dyeing.

A more elaborate version is that Dhirubhai called on Wadia at Neville House during the early 1970s, and made a presentation about the superior quality of his C. Itoh yarn. Wadia questioned the backing for this claim, whereupon Dhirubhai pulled out a copy of a test report made by Bombay Dyeing’s own laboratory for internal company use. Wadia, according to this version, told Dhirubhai that next he would find Reliance telling his laboratory what to report, and that he would not deal with him.2

Dhirubbai has not mentioned this incident, and Wadia has told inquirers he has no memory of it or any other such encounter with Dhirubhai, though he could not completely exclude it as a possibility. Matever the case, Dhirubhai clearly felt put down and, according to many later articles by friendly writers, nursed the hope that one day he would have Wadia coming to him as a supplicant.

The industrial rivalry developed after Wadia took over from his father at Bombay Dyeing and started moves to get the old cotton inill directly into the polyester production chain itself. In 1978, Bombay Dyeing applied to New Delhi for a licence to set up a
DMT
plant, and in December that year it received a ‘letter of intent’ (a preliminary approval) for a 60 000 tonne a year
DMT
plant to be located at Patalganga.

It was a move that would have leapfrogged Bombay Dyeing past Reliance up the petrochemical chain. At the time, Dhirubhai was just moving towards applying for a licence to make polyester yarn, using
DMT
as his initial feedstock. Bombay Dyeing would have become one of only three domestic sources of the chemical, along with Indian Petrochemicals Ltd near Bombay and the Bongaigaon refinery in the eastern state of Assarn.

Wadia would have been in a position to apply Dhirubhai’s own trick of calling down higher tariff protection and then squeezing a bigger profit out of dependent clients-who would include the new Reliance plant.

Though he was not close to the prime minister, Morarji Desai, Nusli Wadia had a good image with the janata government, partly through connections in the Hindu nationalist party in the ruling coalition, the Jana Sangh, predecessor of the Bharatiya Janata Party.

The Scindia family, one of the great Maratha ruling families and hereditary maharajas of Gwalior in central India, had had a business relationship with the Wadias through an investment company that gave them indirectly a minor sharcholding in Bombay Dyeing.

Madhavrao Scindia, the cricket-playing scion of the family had entered parliament with the Jana Sangh before crossing to Congress, where he later flourished as a minister.

But as the months wore on in 1979, nothing happened with Bombay Dyeing’s licence, which normally followed about six months after the letter of intent. Then the Janata government fell, and new elections were called.

Not long before the vote, Wadia received an invitation to come to New Delhi late in 1979 to meet Indira Gandhi and her son Sanjay. He arrived in the capital with some presentation copies of Bombay Dyeing’s new corporate history, marking its centenary year, which he felt might be of interest particularly as Gandhi’s late husband Firoze Gandhi had also been a Parsi.