The war for the Reliance empire

The lesson of invisible dependence on the founder

My professional insights · Lyudmil Karaulanov · 5 min read

Published: 16 October 2026 · Version 1.1

Many companies seem invincible while their creator is available. Key people seek his judgement, and the last word remains his. A business can have a developed professional apparatus and still depend on its founder as the final arbiter between the interests of the owners. The historical case of Reliance and Dhirubhai Ambani develops precisely this aspect of the analysis “Today the business runs well. But what if you are not there?” in the section Succession and generations.

Dhirubhai Ambani built one of India’s great industrial conglomerates. But Reliance was not an enterprise without institutions, contracts and prepared leaders: it was a public company, and Mukesh and Anil had significant management experience during their father’s lifetime. The weakness that subsequent events revealed was more specific: how, after him, supreme authority and the influence of the family owners were to be distributed.

The real test for an organisation, however, is not the day on which the founder gives his usual short answer and moves things along. The test comes when he is suddenly no longer available.

In 2002 Dhirubhai died without leaving a will. This does not mean that the whole corporate system was missing, nor that the two brothers simply received all the shares equally. The inheritance of personal property, control through the family holdings and the management of the public company are separate questions. The problem was that relations between the heirs did not provide a lasting answer as to who sets the common direction. [1]

The conflict became public in 2004. In June 2005, with the mediation of their mother Kokilaben, an agreement was reached to divide the business interests. Its corporate implementation went through a demerger of businesses and the necessary procedures in 2005-2006. Later disputes, including over gas supplies, show that dividing ownership does not automatically end mutual dependencies. This was not a single six-year war ending in one single act. [2-3]

The analytical lesson for the entrepreneur is that succession does not end with the transfer of shares. Prepared heirs may run their own lines of business excellently and still lack a working order for common decisions. Personal authority must be translated into clearly allocated powers, and family arrangements into coordinated corporate actions that also respect the other shareholders.

The practical test has two parts. The first is operational: who signs, approves payments and maintains key relationships in the event of a sudden absence? The second concerns ownership: who appoints management, sets dividend policy and resolves a dispute between branches of the family? The second management echelon solves the first problem; on its own it does not solve the second.

If the outcome is separation, the remaining links must be spelled out: supplies, guarantees, common financing, the brand and shared services. Each needs a price, a term and a mechanism in case of non-performance. Otherwise the separate companies go on carrying the old conflict through new contracts. The link with the next generation begins precisely with this distinction between ownership, management and mutual dependence.

Where is the point of instability?

What this concept means →

The point of instability arises between readiness to manage part of the business and the right to set the direction of the capital as a whole. If the final arbiter is the founder, his absence can leave a vacuum even with strong managers. The opposite risk is that the formal successor is declared responsible while the previous generation continues informally to overturn his decisions.

This material is of a general analytical nature and does not constitute individual legal, tax, financial or investment advice.