From a buyer, Anil Ambani is now a seller

The magic is gone. Last week, when Anil Ambani announced to shareholders his plans to sell stakes in his telecom, asset management and general insurance businesses in order to reduce his enormous, acknowledged debt burden of Rs31,975 crore—it had all the signs of a desperate man at the end of the road.

The state of the financial services businesses in India is such that deals announced in this area carry little weight. Even Mukesh Ambani’s tie-up with DE Shaw has led to more speculation than excitement among shareholders. In fact, many major deals by Indian businessmen today draw whispers about changing Swiss banking secrecy rules and the European financial crisis. The plan to sell a stake in Reliance Infratel, the tower company, may also have had a better reception had two of the group’s top executives not been in jail.

While Anil Ambani got off easy by paying just Rs50 crore and a consent decree from the Securities and Exchange Board of India (SEBI), Mukesh Ambani’s insider trading case may not be settled as easily, because times have changed—both regulators and the government are under intense public scrutiny and reluctant to cut deals. Already, the CAG has said that Reliance should be made to relinquish half the area of the KG Basin hydrocarbon block being held in violation of the production-sharing contract. We live in interesting times—but will they lead to a reduction in corruption?