Indian billionaire Mukesh Ambani will forgo his salary until the pandemic eases
Hong Kong(CNN Business) Asia's richest man said Thursday that he won't be taking home a salary until the impact of the coronavirus pandemic eases.
Mukesh Ambani announced his decision as Reliance Industries — the sprawling oil refining, manufacturing and telecom conglomerate he runs — posted dismal earnings. Net profit slid more than 37% to 65 billion rupees ($850 million) in the three months ended March compared to a year earlier as the firm grappled with the impact of the pandemic.
Oil prices fell to historic lows last month as demand evaporated. Brent crude, the global benchmark, is still trading at less than $30 a barrel. US oil is below $20. The oil crash offset strength in other parts of Reliance's business. Its digital services revenue grew 30% compared to the same time last year.
Ambani is worth $53.4 billion, according to Forbes. The company says his salary has been capped at $2 million since the 2008 financial crisis.
"Now, he is forgoing his salary until the company and all its businesses are fully back to their earnings potential," the company said in a statement.
Bloomberg reported that the company will also cut wages by 10% for all employees earning more than $20,000 a year, citing sources. Reliance declined to comment about that report.
Reliance also announced that it wants to raise money by issuing shares to its existing stakeholders — its first such offering in three decades. The move would allow the firm to raise $7 billion.
"Global oil markets witnessed significant volatility on account of demand destruction and excess supplies," Reliance wrote in a release that accompanied earnings, adding that lockdowns and travel restrictions led to a steep fall in the demand for energy.
Reliance on Thursday said that the company is trying to find ways to respond to the virus. Its philanthropic arm, the Reliance Foundation, helped dedicate hundreds of hospital beds in Mumbai to treating coronavirus patients.
Other divisions at reliance are trying to help expand India's ability to test for the virus and produce face masks and other protective garments for health workers.
Ambani's mobile network, Reliance Jio, has exploded in popularity since launching less than four years ago, racking up 388 million users.
The billionaire also just signed on a huge partner as he continues to tap into India's internet boom. Facebook (FB) announced in April that it will invest $5.7 billion for a 9.99% stake in Jio Platforms, the digital technology arm of Ambani's conglomerate.
The tie-up includes a commercial partnership with WhatsApp that potentially paves the way for Facebook to make money from the messaging service's 400 million users in India.
