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RelianceManagement > Asian Management > Lectures > Independent Research > Reliance > Growth > Finance
FinanceAmbani approached to public to help finance his firm's growth. This meant he needed funds from private investors who were preferred investing in safe return investments, so he had to guarantee them a return by constantly appraising his share prices. In 1982, a bear syndicate on the stock market targeted by Reliance by selling shares, with the implied suggestion that the share price would go down and aimed buy them again at a lower price, pocketing the difference. Ambani recognised this and had a "Friends of Reliance" group buy all the shares the bears had sold (as it was illegal for a company to buy its own shares directly). The bears scrabbled in panic to buy shares back, but they could not and the BSE had to be shut down for three days. The panic of the bears led to a 40% increase in Reliance's shares Clever accounting meant that Reliance avoided paying any tax, even when the Government tried changing the law so that companies had to pay 30% income tax
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