Sunday, November 23, 2008

Recession could unite Ambani brothers

Mumbai. After the Ambani brothers Mukesh and Anil shook hands at L K Advani’s industry meet, a letter, purported to be written by Anil to Mukesh, is causing turmoil in the financial and business world. The letter suggests that junior Ambani is warming up to his elder brother to end differences and merge the businesses of both the groups, which parted ways in 2006.

Faking News has got exclusive copy of the letter written by Anil Ambani and is reproducing below for the benefit of our readers:

“Dear Bhaiyya (hope Raj Thackeray doesn’t mistake you for a Bihari),

I hope your finances are in fine spirits and feeling well, although I know you might be feeling the pinch of the downturn, especially after these guys didn’t allow you to lay-off people from the Retail business. I too wanted to lay-off people from Reliance Capital but I my hands were so tied. That’s why I freed my hands and held it out to shake with yours. I could definitely feel that you too were going through the same phase.

To make things worse, even my personal fortune is going down fast as well. Everyone knows about the falling market capitalization of my shares, but my personal bank balance has gone down drastically. This is the last SMS I received from ICICI Bank (yes, I still bank my cash there):

Your Ac XXXXXX006179 is debited INR 15,00,00,000.00 on 15 Nov. Info: BIL*000084303310*AMARSINGH*NSP . Total Avbl. Bal is INR 13,786.69 . Your money is safe with ICICI. Don’t believe any rumor.

I can’t even sell my shares to get some money for spending, as it might push down the share prices even lower. RBI surely needs to do more to infuse liquidity. But we can’t be waiting for the central bank or the government to do something, we must act now or Forbes will lower our ranks.

I suspect that you are going through same kind of liquidity crunch. And beware, the government is going to make it worse by telling you to bring down the prices of oil, agro products, and medicines just before the elections. I would not be spared either. So we must join hands, not just shake them.

Yours lovingly,
Anil Dhirubhai Ambani.”

The last line of the above letter is making people squirm in the industry. Employees of both Reliances are worried that both brothers might fuse the businesses and lay off employees citing economies of scale and scope. Management of both the Reliances is tight lipped about the possibility, which has increased the discomfort among employees.

Such a step could also create political controversies as BJP is reported to be supporting the merger of both Reliances saying the move signifies the ‘bharat milaap’ episode of Ramayana, which proves the existence of Lord Rama. Samajwadi Party is opposing the possible merger and they have warned Congress to disallow any such step as it might create problems in fund raising for next general elections.

Various business leaders too are feeling edgy over the possibility of both the brothers joining hands as it might create a monopoly in various sectors. A delegation of industry leaders are planning to meet the finance minister and ministry of company affairs to stop the brothers from taking such a step.

But leading management consulting firm McKinsey and Company has advised Indian business leaders not to oppose the move. They have released a report that claims that such a merger will ward off threats of recession in India. But sources tell Faking News that McKinsey is hoping to finally get its consulting fee post merger of both Reliances and hence has come up with such a report.


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