Men who lost their empires : Part I

Everybody loves a rags-to-riches story, a tale of that underdog who came up the tough way and made it to the top. Hollywood has made films on them, artists have composed songs on them and mothers have recited inspiring stories to their children about them. But, what if this tale is turned upside down? How many of us would be interested in a story about someone who had it all, and then went out there and lost it? The answer is – more.

There are numerous reasons why business empires have failed over the years and most can be attributed to a special reason unique to that particular circumstance. However, a few common factors that crop up in most cases are — disregard for the law, illegal actions such as money laundering, stock manipulation, financial crimes, economic downturns, or just, plain stupid!

This two-part series provides a glimpse into how business empires are created; what it takes to mould them into the multi-billion $ money making behemoths which we all have come to know of, and of course, that extra special element which the men on our list possess; the very same men who have had the dubious distinction of running their empire into the ground. The focus of our article is from the Indian standpoint and the three top examples take their colour from the angle of self-destruction of these mighty empires.

  1. Singh Brothers

At the height of its power, Malvinder and Shivinder Singh’s empire boasted mighty investments across Pharmaceutical, Healthcare and Financial Service sectors. Their story began in 1999 when they inherited a publicly listed company that included a licensed subsidiary to sell drugs to a highly profitable US market from their father Parvinder Singh in their mid-twenties.

Business / Sector Name of Company Acquired by
Pharmaceuticals Ranbaxy Laboratories Ltd. Daiichi-Sankyo
Healthcare Fortis Healthcare IHH Healthcare
Financial Services Religare Enterprises Ltd. A consortium of PE investors, Anand Rathi Wealth Management


The early 2000s were a bountiful time for the Singh brothers. A conducive business atmosphere coupled with a steadily rising stock market led the way for their financial success. Through hard work and a good team of competent executives, they were able to grow at a fast pace and evolve their company Ranbaxy into one of the poster boys of the Indian Pharmaceutical Industry. They had success in their financial services venture as well, branching out into financial, insurance and wealth management from merely being a stockbroking firm. It was during this very same period that the brothers founded hospital chain Fortis Healthcare in 2001 which grew exponentially since then and went on to be listed in 2007 and managed to surpass Apollo Hospitals as the largest hospital chain in India by revenues. However, the fortunes of the brothers did not last too long as they went out on an acquisition spree and overburdened themselves with a mountain of debt. Add to this, allegations of siphoning off funds, poor corporate governance and even fraud began to surface. Ranbaxy was sold to Japanese pharma giant Daiichi-Sankyo in 2008 without informing the latter about the US FDA’s investigation on adulteration of drugs on the former. This eventually led to a 500 million $ payout by Daiichi which they will manage to recover with interest from the Singh brothers (just last month the Singapore Court of Appeals ruled in favour of Daiichi). After much drama which included the unseating of founder promoters, shareholder rebellion, board members being replaced, rival bids, counter offers; not to mention allegations of fraud and fiscal mismanagement; Fortis was acquired by Malaysian healthcare giant IHH in 2018. The Singh brother’s fortunes in Religare Enterprises dwindled as well; their shareholding being reduced to a meager 3%; as lenders seized shares pledged with them in lieu of loans given to associate companies. Another twist in this story entails the mysterious relationship the Singh brothers shared with their maternal uncle and spiritual guru — leader of the Radha Soami Satsang Beas (a spiritual commune that sits along the river Beas in northern India and has the backing of 4 million followers) — a man by the name of Gurinder Singh Dhillion. Over the years, the brother’s main holding company, RHC Holdings, loaned approximately Rs 2700 crores to businesses controlled by the Dhillion family at zero interest rate which was not returned to the lender. The downfall of the Singh empire can be attributed to thorough dereliction of corporate governance resulting into related party transactions, unethical practices such as siphoning off funds without board approval, murky business transactions hidden by layers of shell companies, money being continuously routed back and forth under mysterious circumstances to enrich themselves and their spiritual guru (Mr Dhillion) at the cost of the company. The empire went from boom to bust; from being cash rich to the tune of Rs 9500 crores after the sale of Ranbaxy in 2008 to a point where their total debt hit roughly Rs 20,000 crores in 2018.

  1. Anil Ambani

From being one of the richest men in the country to nearly having his empire crumbling right before his eyes; the story of the younger Ambani would make a great case study in Ivy League MBA courses on what NOT to do. After receiving his share in the division of his father — Dhirubhai Ambani’s empire in 2005, which included businesses in the Financial Services, Energy and Telecom sectors; along with cash of Rs 25,000 crores, Anil Ambani was in a sweet spot; financially. Initially, these companies grew at a good pace and provided handsome returns to its investors. By March 2006, with the consolidation of his telecom companies, Anil had toppled his brother Mukesh in net worth to become the third richest Indian after Laxmi Mittal and Azim Premji. However, it was believed that he began to invest his money keeping only short term objectives in mind, unlike his brother who always had a long term game plan. Anil Ambani started investing frivolously in an array of businesses such as entertainment, healthcare, manufacturing, defence, transportation and aviation. Since he was not able to generate much cashflow from his inherited businesses, the source of his aggressive expansion into his new ventures was borrowed money i.e. debt. With the interest meter ticking at a rapid pace, things didn’t go according to plan. The ADA group has 5 listed entities, whose market capitalization peaked out at an astounding Rs 4 lakh crores. Presently, it stands at an embarrassing Rs 26,000 crores.

Sr No. Name of Listed Entity Present Market Cap (as on 4th Jan 2018) Peak Market Cap (Rs in Cr.) Date of Peak Market Cap
1. Reliance Power Ltd. 7,756.17 1,01,790.40 25th Feb 2008
2. Reliance Naval & Engineering 1,017.88 6,732.61 1st Jan 2016
3. Reliance Infrastructure Ltd. 7,805.54 61,115.89 7th Jan 2008
4. Reliance Communications 3,871.75 1,69,320.48 9th Jan 2008
5. Reliance Capital 5,476.20 70,241.16 9th Jan 2008
TOTAL 25,927.54 4,09,200.54


To pare his enormous debt, Anil Ambani sold his Mumbai power business to Adani enterprises for 18,800 crores and is in negotiations to sell his telecom business to his brother as well. Mr Ambani also found himself in the eye of the storm when his flagship company, Reliance Communications Ltd. defaulted on payment of overseas non-convertible debentures to the tune of $300 million in 2017 and has also come under scrutiny over negotiations between France & India for $7.8 billion of Dassault Aviation’s Rafale jets. Reliance Infrastructure Ltd, which built Mumbai’s first metro line, missed a bond payment last year. While he still manages to hold on to his empire by the skin of his teeth, it is in a much-depleted state from what it was in its prime.



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