The Struggle for Control: L&T and the Ambani Family's 1980s Saga In the 1980s, the Indian engineering giant L&T (Larsen & Toubro) became a focal point of a high-stakes battle between its existing management and the Ambani family, led by industrialist Dhirubhai Ambani. This conflict, marked by corporate maneuvering, legal battles, and political intervention, ultimately reshaped the company’s trajectory and the Ambanis’ ambitions. The Ambani Bid for L&T Dhirubhai Ambani, already a towering figure in Indian industry, sought to acquire L&T to expand his empire. His sons, Anil and Mukesh, played pivotal roles in this endeavor. By 1989, the Ambanis had secured a majority stake in L&T, with Dhirubhai appointed as chairman. However, tensions quickly emerged between the Ambanis and the company’s existing management, led by chairman D. N. Desai. Desai, who had led L&T since 1982, faced declining performance metrics. Under his tenure, L&T’s profitability dropped significantly: per rupee earnings fell from 8 paise to 4 paise, net returns plummeted from 22% to 10%, and asset returns dropped from 7% to 3%. These figures underscored the need for a management overhaul, which the Ambanis promised to deliver. Legal and Political Turmoil The Ambanis’ control over L&T was soon challenged. In August 1989, journalist S. Gurumurti exposed alleged irregularities in the acquisition process. He accused financial institutions of violating regulations by transferring L&T shares to a new entity, Bob Fiscal, without proper authorization. The controversy linked L&T’s acquisition to Reliance Industries’ Hazira project, which required funding. Reliance had raised ₹6 billion in debentures but faced liquidity issues, prompting the Ambanis to acquire L&T to secure the funds.#anil_ambani #reliance_industries #mukesh_ambani #dhirubhai_ambani #d_n_desai
