Dhirubhai and V P Singh

It was widely known that Dhirubhai didnt enjoy cordial relations with Vishwanath Pratap Singh, who succeeded Rajiv Gandhi as the Prime Minister of India. In May 1985, V. P. Singh suddenly stopped the import of Purified Terephthalic Acid from the Open General License category. As a raw material this was very important to manufacture polyester filament yarn. This made it very difficult for Reliance to carry on operations. Reliance was able to secure, from various financial institutions, letters of credit that would allow it to import almost one full year s requirement of PTA on the eve of the issuance of the government notification, changing the category under which PTA could be imported. In 1990, the government owned financial institutions like the Life Insurance Corporation of India and the General Insurance Corporation stonewalled attempts by the Reliance group to acquire managerial control over Larsen & Toubro. Sensing defeat, the Ambanis resigned from the board of the company. Dhirubhai, who had become L&Ts chairman in April 1989, had to quit his post to make way for D. N. Ghosh, former chairman of the State Bank of India. It is also believed that V. P. Singhs move as Defence Minister came as a direct result of him catching Dhirubhais tax evasion.