Real Talk : The Arnault and Ambani Story In Retrospect

When you’re associated in any sort of business, big or small, there will always be a certain percentage of risk factor involved. The trick is to study the pitfalls of business and slowly build up expertise on how to maneuver around the snares. Nonetheless, one cannot underestimate how much a certain level of foresight and luck comes into play while running a successful business.

The Prestige brings to you the stories of two big players in the world of business – one of whom got ranked as the second richest person in the world this year, and the other who recently declared bankruptcy. We present to you the journeys of Bernard Arnault and Anil Ambani.

Bernard Arnault, the CEO of LVMH (Moët Hennessy – Louis Vuitton), now has the second largest wealth accumulation ($103.2 billion) in the world, coming in just below Jeff Bezos, who with his net worth of $124 billion (after subtracting shares of Amazon that will soon belong to his ex-wife), still occupies the first position in the list of the richest people in the world. Last January, Arnault was considered to be the fourth richest person alive, but he quickly climbed up the ranks and displaced Bill Gates (net worth: $102.9 billion) and Warren Buffett (net worth: $84.3 billion) by accumulating $39 billion dollars in the past six months. Just in the first three months of 2019, the luxury goods titan added over $14 billion to his net worth, which is roughly equivalent of drug lord El Chapo’s entire empire. As reported by the Bloomberg Billionaires Index, Arnault has made more money in 2019 than anyone else listed on the index. Moreover, Arnault’s personal gains this year are on par with the combined revenues garnered by Apple’s App Store and Google Play.

The 70 year old billionaire still isn’t complacent. He continues to change and innovate LVMH through new business ventures. Just recently, Arnault has purchased Christian Dior and has signed a deal with fashion designer Stella McCartney. The aim of the partnership with McCartney is not only to grow the Stella McCartney house, but also to expand LVMH’s sustainability efforts. These deals follow the LVMH’s recent acquisition of Belmond, which operates luxury hotels and trains, and the high-profile partnership with Rihanna and her brands, Fenti Beauty and Fenti Fashion House.

Bernard Arnault maintains that there is still room for LVMH to grow. Even though it seems unlikely that Arnault will ever surpass Bezos as the richest man alive, we still cannot rule out the possibility of it ever occurring. A jump in the profits of LVMH and a drop in Amazon’s could possibly close the gap and make Bernard Arnault the highest earning male in the very near future.

On the other hand, there is Anil Ambani, the chairman of Reliance Group. Back in 2008, Ambani was named the 6th richest person in the world. “It’s all paper money, nothing more,” Ambani had said in a conference, upon being asked about the growth in his personal wealth. As the situation stands now, Ambani doesn’t have much of that left. This year, in the month of May, two of Ambani’s group companies, Reliance Communications and Reliance Naval, announced bankruptcy. The rest of his endeavors are swimming in auditing troubles and losses. Anil Ambani’s net-worth, which was $42 billion in early 2008 has now been reduced to a mere $1.5 billion, and he is precariously close to being kicked out of the billionaire’s club.

Anil Ambani’s troubles started from 2008. As result of a crash in the stock market, Ambani lost $30 billion which decreased his wealth to $12 billion. Within the next two years his situation improved slightly as the stock market regained balance, but his subsidiary companies were still running on steam, which led his net-worth to fall to $8.8 billion. This fall continued even further as the new initiatives taken by Reliance Group, such as the Krishnapatnam Power Plant proved to be a money pit-fall. The situation further worsened as Ambani got tied up in the 2G scam, which eventually led him to be questioned by the Central Bureau of Investigation about his involvement in the promotion of Swan Telecom – a company which evidently had a lot discrepancies surrounding it. As Ambani’s borrowings swelled and he started to fail to deliver value to his investors, it became apparent that Reliance Naval would also have to file for bankruptcy alongside Reliance Communication. Finally, in 2019, the high-court presented Ambani with two alternatives: he could either pay up his dues to Ericcsson or go to jail. He was then bailed out by his big brother, Mukesh Ambani, who paid the $4.5 billion that was owed to Ericcsson.

In the last month, Ambani’s group has been slipping deeper and deeper into trouble as more and more discrepancies are being brought to light. Unfortunately for Ambani, his troubles are far from over, as he has three Chinese Banks hounding him for $2.1 billion, which is nearly double the sum of Ambani’s net-worth today.

The booms and busts of businesses are the same as the highs and lows of life. They come and go, and life goes on. The aforementioned businessmen only serve as examples to remind us that money and earning money shouldn’t be the primary goal of one’s life. There’s much more that needs to be felt and explored – some things that go beyond what money can buy.