Mukesh Ambani’s master plan aims to avoid the mistakes of the past – may divide responsibilities among children
Mukesh Ambani, Asia’s richest man and Chairman and Managing Director of Reliance Industries Ltd, is preparing a succession plan for his $208 billion empire that spans oil refining, petrochemicals, and telecom, in addition to working on big ideas that will shape the future course of India’s biggest company in terms of market capitalisation.
Possibly, after learning from his own family’s and other Asia’s wealthiest families’ mistakes. Mukesh Ambani would like to borrow a page from the Walton family’s playbook on wealth transfer to avoid resurrecting old memories of civil war in the Ambani family. According to Bloomberg, citing people familiar with the situation. According to the research, Sam Walton, the founder of Walmart Inc, the world’s largest retailer, followed a straightforward succession model: keep the family at the centre while delegating management power.
The Ambani family Dispute
After the death of their father in 2002, Mukesh and his brother Anil Ambani had a terrible dispute.
Dhirajlal Hirachand Ambani, better known as Dhirubhai Ambani, Mukesh Ambani’s father, created Reliance in 1973. He oversaw the family’s transition from textiles to oil, but his untimely death in 2002 threw the family into turmoil. As their business decisions clashed, Mukesh and his brother Anil Ambani’s differences grew.
After three years of fighting, their mother Kokilaben intervened in 2005 and divided Reliance’s assets. Mukesh Ambani was given the refining, petrochemicals, oil and gas, and textile industries in the family business split, while Anil Ambani was given the telecoms, asset management, entertainment, and power generation businesses.
Mukesh Ambani has effectively transformed Reliance into a giant with holdings in everything from crude refining to mobile communication, commerce, and the clean energy field over the course of several years. On a worldwide scale, Ambani has taken on Amazon and Walmart, and has partnered with internet titans like Google and Facebook to redefine his company’s position. Anil Ambani’s commercial empire, on the other hand, disintegrated due to a series of errors.
Mukesh Ambani Looks to Walton Family Playbook on Succession
The Walton family owns one of the world’s largest conglomerates, Walmart, which was founded by American industrialist Sam Walton and has since grown to become the world’s largest retailer. Both of his sons are on the company’s board of directors. While the world’s wealthiest family has been chastised for prioritising the family’s interests over those of shareholders, the Arkansas-based firm says it operates within the bounds of the law.
According to Bloomberg, the Ambani family is about to divide again, with the Mumbai Indians owner wanting to pass on the Reliance company to his heirs.
Mukesh Ambani has spent years researching how billionaire families, from the Waltons to the Kochs, passed on their wealth to the next generation.
People familiar with the situation say the 64-year-old Indian tycoon’s favoured plan has components with that of Walmart Inc.’s Walton family, and may offer the structure for one of the largest wealth transfers in recent history. Ambani is considering putting his family’s assets under a trust-like structure that will manage Reliance Industries Ltd, the Mumbai-listed flagship.
Educating the Ambani family’s future generations
Mukesh Ambani stated at the company’s annual general meeting (AGM) in June 2021 that his children will now play a key role in the family’s massive conglomerate. He’d stated: “I have no doubt whatsoever that the next generation of leaders at Reliance, led by Isha, Akash and Anant, will further enrich this precious legacy.”
Mukesh Ambani is planning ahead of time and has already begun preparing his children for future jobs. Akash and Isha, his twin children, are also involved in the group’s new-age retail and telecom operations. Both of them were appointed to the boards of directors of RIL’s telecom and retail operations in 2014.
According to Bloomberg, Asia’s richest man is creating a strategy for his $208 billion empire’s next stage among his children.
Anant Ambani, his eldest son, is currently a director of Jio Platforms Ltd, a wholly-owned subsidiary of Reliance Industries. As a director, he oversees Reliance’s renewable energy, oil, and chemical businesses.
What Is Ambani’s Succession Plan?
According to the news agency, Mukesh Ambani aims to put the family’s holdings into a trust-like structure to ensure a seamless transition. The trust will have complete authority over Reliance Industries, and the new corporation could include all of the Ambani family members on its board of directors, including wife Nita Ambani and his three children, twins Akash and Isha (30) and Anant (26).
Ambani and his wife Nita, and their three children will have shares in and serve on the board of the new organisation that will control Reliance, as well as a few of Ambani’s long-term confidants as advisers.
The day-to-day operations of India’s most powerful company and its businesses, which range from oil refining and petrochemicals to telecommunications, e-commerce, and green energy, will be entrusted largely to outsiders, professionals who will handle the day-to-day operations of India’s most influential company and its businesses.
The way Asia’s wealthiest person handles succession may inspire others in the region to think more carefully about how they pass down family wealth and power. According to some sources, Ambani, who has a net worth of $94 billion, is still weighing his choices and has yet to make a decision.
Given the travails of renowned families worldwide, the present crop of Asian tycoons is painfully aware of the hazards posed by succession. While Ambani has not officially stated that he intends to stand down as chairman and managing director of Reliance Industries, his children are becoming more conspicuous. This is how I’ll address shareholders. In June, Ambani offered the first hint that his children, twins Akash and Isha, 30, and Anant, 26, will play key roles at Reliance.