Microsoft CEO Ballmer drops a bombshell, says he and Mukesh D. Ambani dropped out of Stanford MBA class

Paranjoy Guha Thakurta
New Delhi

‘Steve and I were part of the same class at Stanford University School of Business. Steve went on to configure Microsoft, I came back to India to help my father build Reliance’

It was about as fancy a bash as Mumbai’s top brass could have organised. The venue was, of course, a five-star hotel. Those invited included the cream of corporate captains from the city. The distinguished guest for the evening to speak on the topic ‘Unlocking Innovation’ was the CEO of one the best known companies in the world, Microsoft Corporation. To introduce the speaker, Steve Ballmer, was his classmate from the Stanford University’s School of Business, Mukesh D. Ambani, who is the Chairman and Managing Director of India’s largest privately-owned company, Reliance Industries Limited. The main sponsor of the event was cnbc-tv18, a television channel in which a Reliance group company has an equity stake.

The evening began with Mukesh Ambani introducing the ‘towering figure’ of Ballmer who is a ‘household name all over the world’. He started by stating: “Steve and I were part of the same class at the Stanford University School of Business. Steve went on to configure one of the greatest innovation-led enterprises of all time, Microsoft. I came back to India to help my father build Reliance, virtually from nothing to a $ 23 billion corporation with global standing today.”

“As CEO of Microsoft, Steve has infused in the organisation a creative blend of energy and discipline. I am not surprised. Even at Stanford, he displayed outstanding qualities of leadership and creativity. In all our study groups, Steve always took charge. But what impressed me the most about him was his human qualities, his ability to connect with all his classmates and build a rapport with each and every one of them.”

The 47-year-old elder son of the late Dhirubhai Ambani heaped more fulsome praise on his Stanford University classmate by extolling his high energy levels before it was time for Ballmer to walk with a springing gait and come up in front of the arc lights to the resounding sound of orchestral music before making his presentation before the elite gathering. “Wow,” he started. “That was quite a bit of music and video there.”

Ballmer then said how it was an honour and a privilege for him to speak with those present about innovation, not only from the vantage point of a corporation that applied it but also from the point of view of organisations that applied technological innovations. “But before I dive into it,” said the balding Microsoft CEO, “I want to put in one piece of information that Mukesh left out of his very wonderful and kind introduction.”

‘I want to put in one piece of information that Mukesh left out. In our class at Stanford, there were exactly two people who dropped out at the end of the first year, me and Mukesh’

Before he dropped a bombshell, Ballmer said: “I hope he (Mukesh) won’t mind.” “But in our class in Stanford Business School, there were exactly two people who dropped out at the end of the first year, me and Mukesh,” disclosed Ballmer with a beaming smile to a round of loud applause from those present. He didn’t stop there. As the clapping subsided, he quipped: “So I’m not sure what qualifications we have to speak with you on innovation, but we’re going to anyway.” More applause followed.

A senior executive of the Reliance group, who now happens to be firmly in the camp of Mukesh Ambani’s estranged younger brother Anil, was to later remark: “Some of us didn’t know what hit us at that time. Frankly, I wasn’t sure whether to laugh or cry, whether to believe Steve Ballmer or to treat it as a joke.”

Subsequently, this executive spent some time surfing the internet scanning the university’s alumni list of MBA students. He couldn’t find the name of Mukesh D. Ambani in the list, although it was noted elsewhere that he had once addressed a gathering at the university. “I then decided to ask Anilbhai about whether Steve Ballmer was correct or not and he confirmed that his brother had indeed not completed his two-year MBA degree course but had dropped out after the first year,” this executive said.

The surprise that the Microsoft CEO’s off-the-cuff remark caused to this unnamed executive was not atypical. After all, the head of the giant corporate conglomerate — that has an annual turnover equal to 3.5 percent of India’s gross domestic product, pays one-tenth of the Government of India’s indirect tax revenues and boasts of some 3.5 million shareholders — has, from the time he returned to India from the US in 1981, always been claiming he holds a MBA degree from Stanford University instead of stating that he merely studied there. The ‘fact’ of his holding an MBA has been explicitly stated time and again in various official documents such as annual reports of companies in the Reliance group, including the group’s flagship Reliance Industries Limited. After the November 17 function that featured Ballmer’s presentation got over, Mukesh Ambani was asked by a journalist from CNBC-TV18 to comment on rumours that there would be a split between him and Anil. That was when he made his now-famous remarks about ‘ownership issues’ in the ‘private domain’ that sparked off a controversy, which is still raging. On that occasion, Mukesh Ambani talked about how Reliance has moved beyond a few individuals and was ‘one of the strongest, professionally managed’ organisations in the country.

True Lies: an excerpt from RIL’s annual report that claims Mukesh is a Stanford MBA

An e-mail sent to Reliance spokesmen asking for a clarification on Ballmer’s statement was not answered.

In view of the muck that has been splashed across newspapers and magazines since that fateful evening, the entire nation now knows better. Hardly a day passes when one cannot read about how individuals close to the Reliance CEO have set up a maze of closely held firms that have made large profits at the expense of the publicly-owned flagship. Facts have been printed in excruciating detail about how shareholders’ funds were allegedly diverted for the benefit of a few.

The business activities of a clutch of individuals close to Mukesh Ambani (including those who had studied with him in school and college) have also become common knowledge. Such persons include Anand Jain, Manoj P. Modi, Mahesh Kamdar and Sandeep Tandon. They, their wives, children, family members and close associates control companies that have obtained lucrative contracts with the Reliance group. Talk about good corporate governance!

To turn around Ballmer’s remark, it is worth asking: Does Mukesh Ambani possess the necessary ‘qualifications’ to extol the virtues of professional management?