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Karmayogi
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Indian to the core, and an
Oligarch
15 June 2008, New York Times
AT a
recent cricket match here, Mukesh D. Ambani sat in his private box quietly
watching the team he owns, the Mumbai Indians. He seemed oblivious to the
others around him: his son cheering wildly, his wife draped in diamond
jewelry and a smattering of guests anxiously awaiting the briefest
opportunity to speak with him. A minor bureaucrat stood a few rows back,
strategizing with aides about how to buttonhole “the Chairman,” as Mr.
Ambani is sometimes called. Waiters in baggy tuxedoes took turns trying to
offer him a snack, but as they drew near became too nervous to speak.
In the last century,
Mohandas K. Gandhi was India’s most famous and powerful private citizen.
Today, Mr. Ambani is widely regarded as playing that role, though in a very
different way. Like Mr. Gandhi, Mr. Ambani belongs to a merchant caste known
as the modh banias, is a vegetarian and a teetotaler and is a revolutionary
thinker with bold ideas for what India ought to become.
Yet Mr. Gandhi was a
scrawny ascetic, a champion of the village, a skeptic of modernity and a man
focused on spiritual purity. Mr. Ambani is a fleshy oligarch, a champion of
the city, a burier of the past and a man who deftly — and, some critics say,
ruthlessly — wields financial power. He is the richest person in India, with
a fortune estimated in the tens of billions of dollars, and many people here
expect that he will be the richest person on earth before long.
Although he lacks a
politician’s silver tongue — he can be a nervous public speaker, and his
diction can be halting — he talks more like a father of the nation than a
corporate executive. Describing his goals, he says they are for India’s
benefit as much as they are for his sprawling company, Reliance Industries.
“Can we really banish
abject poverty in this country?” he mused aloud in a rare interview at his
headquarters here. “Yes, in 10, 15 years we can say we would have done that
substantially. Can we make sure that we create a social structure where we
remove untouchability? We’re fast moving to a new India where you don’t
think about this caste and that caste.”
As millions of Indians
graduate from burning cow dung for energy to guzzling oil, Reliance is
plowing billions of dollars into energy exploration and is building the
world’s largest oil refinery. It has also opened a chain of nearly 700
stores selling food and various wares; Mr. Ambani promises that it will
funnel money from the flourishing cities into the struggling agricultural
heartland. He envisions Reliance, with $39 billion in revenue, as providing
incomes to 12 million to 30 million Indians within the next five
years by buying from farmers and employing new workers in its stores.
And as Mumbai, Mr.
Ambani’s hometown and the commercial and entertainment capital of India, has
grown ever more populous and ever less livable, he has proposed that
Reliance simply build a new, improved city across the harbor.
MR. AMBANI, 51, who after
their father died six years ago, took control of roughly half of the divided
company. Even as he enters new areas, he has maintained his family’s
dominance in its petrochemical, oil and gas and textile manufacturing
businesses.
He maintains a low public
profile; even those close to him describe him as inscrutable. On one hand,
he is seen as a man whose heart bleeds for India. He is motivated by “the
ability to change the face of the country,” said K. V. Kamath, the C.E.O. of
ICICI Bank and a longtime financier and friend of the Ambanis. “That is the
biggest kick anybody would get today — that they could touch the lives of a
large number of these billion people and make things better for them.” On
the other hand, Mr. Ambani is also known as someone who lets little stand in
his or Reliance’s way.
“Remember: these guys all
grew up in the License Raj,” said a close friend of the tycoon, referring to
India’s decades-long experiment with rigid state control over the economy.
“They grew up as lotuses from the filth. It makes them tough, it makes them
suspicious, it makes them vindictive at times, and it makes them come out in
a hurry. They always see life as, ‘Oh God, better not miss an opportunity.’”
“When they were growing up,” added the friend, who requested anonymity for
fear of upsetting Mr. Ambani, “you didn’t get a second chance.”
Emblematic of his ascent
is the towering residence he is building on what was once known as
Altamount Road, one of the most exclusive streets here.
Hundreds of feet tall, it will offer several levels of parking, a
multi-tiered gymnasium, a ballroom, a theater, ample living and guest
quarters, and a helipad on the roof. (Although the price tag for the
residence has drawn estimates as high as $2 billion, a Reliance spokesman
said it would ultimately cost $50 million to $70 million.)
For
generations, Altamount was a favored address for India’s Anglicized elite, a
group British imperialists groomed in their own image. To a 19th-century
British official, Thomas Babington Macaulay, they were “interpreters between
us and the millions whom we govern; a class of persons, Indian in blood and
color, but English in taste, in opinions, in morals and in intellect.”
As time went on, the
elites were steeped in British culture, spoke with Oxbridge accents,
pooh-poohed Bollywood films and danced only to British and American music.
They dismissed those who spoke Indian languages at home as “vernies,” short
for “vernaculars.” Then, in the 1990s, Bombay changed its name to Mumbai,
and Altamount was renamed S. K. Barodawalla Marg. Neither name has stuck
with everyone, but the changes were part of an emerging movement to purge
India of its colonial legacy.
Such changes accompanied
the rise to power of a new class of Indians who want to live and work and
raise their children in India, who are tethered to Indian values, food and
popular culture and who are unapologetic about their indigenous tastes. The
Ambanis are this class’s first family.
MANY other Indian business
families have been rich for generations, and their scions don finely cut
suits and flaunt fussy tastes. Ratan Tata cruises down Marine Drive on
Sundays in fast cars and favors Hermès ties with matching handkerchiefs.
Vijay Mallya is said to be trailed in his home by a butler holding a silver
tray with a cigar and a Scotch. Adi and Parmeshwar Godrej are famous for
soirées that attract Hollywood stars.
Mr. Ambani comports
himself quite differently. Among family members, he prefers speaking
Gujarati to English, friends say. He may ask colleagues to stop at the
temple with him during business trips to partake in a ritual Hindu prayer.
He loathes Western suits, preferring a white short-sleeved shirt, black
trousers and black shoes that resemble sneakers cross-bred with office
wingtips.
His idea of entertainment
is not ballet but Bollywood; he watches as many as three films a week at
home in a private theater. “You need some amount of escapism in life,” he
says. “Those two or three hours give you relief.” He has a legendary
appetite, but mostly for the food of the bustling Mumbai streets. He has
been known to walk out of fancy restaurants in search of dosas, south Indian
crepes sold by the roadside. And he carries those preferences with him when
he travels.
One evening, when Mr.
Ambani and a former Stanford classmate, Akhil Gupta, were in New York, they
dined at Nobu, the popular Japanese restaurant. Mr. Ambani, a vegetarian,
picked at the fare, finding it bland. At the end of the meal, Mr. Gupta
recalls him saying: “That was nice. Now should we go have dinner?”
For Mr. Ambani, it’s all a
matter of comfort food. “Personally, I still have to eat my dal, roti,
chaval,” he says, using the Hindi words for lentil soup, flatbread and rice.
“I just have not developed those tastes.”
He recalls “a lot of
emulation” of Western ways surrounding him as a child. “My view was: ‘What
the hell, man! We can do what we feel like.’ I think what has changed now,
and it is changing in multiple generations, is this self-confidence and
self-belief.”
His preferences reflect a
wider cultural transformation in India, admirers say. “If you look at his
interests, they’re very rooted in India,” says Nandan M. Nilekani,
co-chairman of Infosys Technologies, a leading outsourcing company in India.
“He’s not trying to impress anyone else. It’s part of a broader shift in
self-confidence that is happening, where people are no longer looking at
Westernized symbols of having arrived.”
The foundation of the
Ambanis’ wealth was laid relatively recently, when Mr. Ambani’s father,
Dhirubhai, opened Reliance’s doors in 1958, the year after Mr. Ambani was
born. The father started the company in a tiny, sparsely furnished trading
office in Mumbai, first exporting spices to Yemen, then entering the yarn
trade, a business that required special canniness. At that time, the
government was severely restricting large-scale manufacturing, so importing
yarn required hard-to-get licenses and creative maneuvering around the
bureaucracy.
Mr.
Ambani and his younger brother, Anil, spent their childhoods in the
down-market Bhuleshwar neighborhood, in a two-bedroom apartment in a humble
building that Mumbai residents call a “chawl”: a tenement obscured from
major roads by more attractive towers. Metal grates still cover the windows
and, in a country where a maid is a hallmark of middle-class life, the
neighborhood’s chores fall to homemakers who flog mattresses clean and scrub
dirty clothes in soapy buckets.
It is customary in the
chawls to live communally: anyone’s children are everyone’s children, and as
a child Mr. Ambani would visit a neighbor’s house to feast on puris, small
discs of fried wheat. In that house one day, a bathroom door slammed shut
and severed half of his left pinky. Times were tight in his youth, and he
went without an allowance. Friends say, and Mr. Ambani agrees, that growing
up as he did gave him an edge over many business peers: While he would go on
to enjoy all the privileges of a second-generation billionaire, his early
childhood instilled the combative mentality of an outsider typically found
among first-generation entrepreneurs.
“All of us, in a sense,
struggle continuously all the time, because we never get what we want,” Mr.
Ambani says. “The important thing which I’ve really learned is how do you
not give up, because you never succeed in the first attempt.”
Reliance was thriving by
the late 1960s, and the family moved out of the chawls and into one of
Mumbai’s best neighborhoods. But his father, who had never finished high
school and worried that his children might grow up too pampered, hired a
tutor whose responsibility was to spend three hours a day taking Mukesh, and
later his siblings, on working-class field trips: riding public
transportation, buying tickets at the rail station. Once a year, the tutor
arranged a visit to a village for about two weeks.
It was “one of the best
things that happened to me in my life,” Mr. Ambani said of the field trips.
“We never studied. We went out and learned how to play hockey. And we went
by bus, and we went by train, and we said, ‘This is what life looks like.’ ”
Years later, when Mr.
Ambani enrolled in an M.B.A. program at Stanford, his father clung to the
belief that real learning came in the trenches, not in academic enclaves
like Palo Alto. He summoned Mr. Ambani home in 1980, halfway through the
two-year program, to take charge of a yarn manufacturing project.
Working in an Indian
village, he won high praise from some of those around him. He slept in a
trailer on site and juggled an attention to detail with big dreams. “I found
him an extremely receptive listener who was learning all the time,” said Mr.
Kamath, a lender to the Ambanis at the time. “He virtually camped out there.
It is very unusual for any leader that I have dealt with.”
FRIENDS of Mr. Ambani say
the plant’s completion, on schedule, marked his emergence as his own man in
his father’s burgeoning corporate empire. By then, Reliance was already one
of India’s boldest companies, combining a heady vision for the future with
the brass-knuckle tactics required to get there.
In setting up the yarn
factory, Mr. Ambani also displayed the first glimmers of his management
style. The close friend who had spoken on the condition of anonymity
compared Mr. Ambani to the mom-and-pop traders who populated his Gujarati
caste ancestry: “He’s a guy who likes to get his hands dirty,” he says. “He
is a shopkeeper in many ways. He wants to sit at the till. He wants to see
what’s going on.”
His greatest talent, as
Ravi Venkatesan, the chairman of Microsoft India, puts it, is for being “in
the clouds as well as in the details. In my life, I’ve only met a few people
who are able to think on a staggering scale and take the risks to match it.
Bill Gates comes to mind.”
As Mr. Ambani grew older,
Reliance entered a raft of new businesses, gaining more power and placing
ever bigger bets on nascent industries. As the eldest son in a traditional
Indian family, he helped oversee the company’s diversification into
petrochemicals, then energy, then cellphones. His father made him a board
member at the age of 17 or 18, he says; and because he was involved with
Reliance when it was “just a textile company,” he says he has always felt
that he built it with his father, rather than simply inheriting it.
“My
big advantage was to have my father accept me as first-generation,” he says.
“He treated me like a partner, saying, ‘O.K., let’s go do this.’ And more
than that, he gave me the full freedom, the ability to bet the house. So in
1980, he was saying, ‘Here, take 80 crores of rupees’ ” — about $100 million
then — “ ‘and build a polyester plant.’ ”
Over the years, Reliance
morphed from a small family business into a publicly traded empire, adopting
new standards of corporate governance, publishing glossy annual reports and
signing up shareholders across the nation. By the time the elder Mr. Ambani
died, in 2002, he had become a legend, mourned by throngs of ordinary
Indians winding through Mumbai’s streets. The socialist, Gandhian regime he
challenged had yielded, beginning in the 1990s, to the kind of bare-knuckles
capitalism he had zealously advocated.
Arun Shourie, a politician
and former cabinet minister who in his younger days as a journalist had
publicly crusaded against Reliance and what he considered to be its
heavy-handed business practices, acknowledged a year after the elder Mr.
Ambani’s death that he had made a “180-degree turn” in his view of the
company. “They set up world-class companies and facilities in spite of those
regulations,” he said in a speech in 2003. “By exceeding the limits and
restrictions, they created the case for scrapping those regulations. They
made a case for reforms.”
IN 2004, two years after
the elder Mr. Ambani died, his sons began battling each other for control of
Reliance. Their mother, Kokilaben, also a major shareholder, ended the
squabble in 2005 by giving Anil control of Reliance’s newer service
businesses like telecommunications, electric power and banking. Mukesh got
the portfolio of industrial businesses. Each half now operates
independently. Today, both brothers are respected chief executives, though
neither of the brothers publicly discusses the relationship.
Anil Ambani, who friends
say struggled to be taken seriously as Mr. Ambani’s younger brother, has
emerged on his own as a business leader, taking the cellphone business, in
particular, to new heights. But it is his older brother, with his
gargantuan, quasi-public projects in energy, retailing and urban renewal,
who has become the most visible symbol of India’s visceral transformation.
Ticking off one Indian
problem at a time, Mr. Ambani has proposed for each a Reliance solution.
While India was once largely self-sufficient in oil and gas, a swelling
middle class is burning ever more energy, forcing India to become an energy
importer and straining the country’s development. So he is building a
world-class oil refining and petrochemical complex in Jamnagar, in the
western state of Gujarat.
The $6 billion facility
can already process 660,000 barrels a day, and it has helped India to become
self-sufficient in producing finished gasoline — though it still must import
crude oil. It is one of the most profitable refineries in the world, and Mr.
Ambani plans to double its capacity.
Two-thirds of India’s 1.1
billion people still live off the land, and to combat the cycle of poverty
that ensnares rural dwellers — while presumably making a handsome profit for
his company — Mr. Ambani also wants to foment an agricultural revolution.
He has begun building a
nationwide network of hundreds of Western-style supermarkets and other
retail outlets, hoping to connect them directly with farmers who have
traditionally sold to middlemen, many of whom pay less than market prices
and are widely regarded as deceitful and usurious.
In some regions,
Reliance’s supermarket push has caused grateful farmers to change their
habits and become more productive. But in other areas, landowners have
protested Reliance’s acquisition of their property; elsewhere, shopkeepers
have staged violent rallies against a supermarket chain that they fear will
decimate them. Some states, including Uttar Pradesh, have sought to block
Reliance from their territory.
However these challenges are resolved, some businessmen say Mr. Ambani has
already established himself as India’s great transformer, with a legacy that
has much in common with American industrialists of the 19th century. “When
we talk about Rockefeller and Carnegie and all these guys, they really each
changed one industry,” said Mr. Nilekani, the Infosys co-chairman. “But if
you look at what he’s doing, he’s really changing three or four industries.”
Like Rockefeller and
Carnegie, however, Mr. Ambani has also gone to great lengths — and, critics
say, used tough-minded, combative tactics — to secure his company’s
fortunes, as well as its social and political influence.
DRIVE past the Makers
Chambers IV building in Mumbai on a Saturday night, where Reliance’s
headquarters are housed, and you often see the lights blazing inside. Mr.
Ambani routinely enters the office after 11 a.m. and stays as late as
midnight — even on Saturdays. Employees, eager to follow their leader,
usually do the same.
Reliance, like many of its
peers, is something of a hierarchical, old-style Indian enterprise, despite
its accomplishments. Companies like these are typically run by a big family,
whose word is law and whose patriarch’s photo, garlanded with flowers, is
everywhere. They tend to have a layer of courtiers below the ruling family
who are valued for loyalty as much as merit. Playful disagreements are
tolerated, but the boss is often insulated from actual criticism.
In addition to keeping a
tight rein on employees, the old-style companies tend to work hard at
“managing government,” as their executives call it. Sometimes that involves
outright bribery of government officials; sometimes it might involve paying
the American college tuition of a bureaucrat’s child. Although rumors that
it actively engages in bribery swirl around Reliance, Mr. Ambani says it has
never paid a bribe or broken a rule. “These are all fables,” he says,
dismissing the rumors.
But he concedes that there
are indirect ways for Reliance to curry favor. Although he says Reliance
“never” pays the tuitions of bureaucrats’ children, he also acknowledges
that foundations controlled by or affiliated with Reliance sometimes have.
“Some foundation would have given some scholarship maybe, but that’s all out
in the public domain,” he says. In interviews, two former Reliance employees
and other close associates of Mr. Ambani, all of whom requested anonymity
because they were afraid of jeopardizing relationships with him, say the
company also routinely engages in political lobbying and covert monitoring
to gain a leg up on its rivals.
To be sure, such practices
are hardly uncommon in India. But people in the Indian business scene say
few companies match Reliance’s record of having laws changed in its favor
and of protecting itself from extensive outside scrutiny. “Everyone is
trying to bend the rules,” said Deepak Talwar, a New Delhi lobbyist who has
never worked for Reliance but described Mr. Ambani as a friend. “They just
do it better, with a combination of understanding, relationships and a bit
of cash.”
Mr. Ambani, however,
disagrees with at least one element of Mr. Talwar’s calculus. “I don’t think
that payments per se work,” he says. “I personally think that money can do
very little. And this has been my experience all across.”
Mr. Ambani doesn’t dispute
that Reliance tries to exert its influence when necessary, but says that
influence-peddling is unimportant relative to its other strengths. “I still
think that’s not a critical success factor,” he says.
What is a factor is
“relationships,” a word that Mr. Ambani and his acolytes relish. “We
believe in relationships,” he says. If someone helpful to Reliance needs
an introduction, consider it done. If they need to use the private jet or
gain access to a coveted temple to pray, consider it done.
What
most distinguishes Reliance from its rivals is what Mr. Ambani’s friends and
associates describe as his “intelligence agency,” a network of lobbyists and
spies in New Delhi who they say collect data about the vulnerabilities of
the powerful, about the minutiae of bureaucrats’ schedules, about the
activities of their competitors.
Mr. Ambani said in the
interview that all such activities were overseen by his brother before they
split, and had since been expunged from his tranche of the company. “We
de-merged all of that,” he says, breaking out in a belly laugh. A spokesman
for Anil Ambani declined to comment.
Nonetheless, Reliance,
some observers say, still manages to stay very well informed. “Their
intelligence on government is very strong,” Mr. Talwar says. “If a meeting
were to be held and the subject was affecting their business, they would
know about it.”
Critics say Reliance has
been especially effective at managing the press. Both former Reliance
executives, who requested anonymity for fear of angering Mr. Ambani, say the
company has actively curried favor with journalists to help it track the
progress of negative articles. A prominent Indian editor, formerly of The
Times of India, who requested anonymity because of concerns about upsetting
Mr. Ambani, says Reliance maintains good relationships with newspaper
owners; editors, in turn, fear investigating it too closely. “I don’t think
anyone else comes close to it,” the editor said of Reliance’s sway. “I don’t
think anyone is able to work the system as they can.”
And the net result is
plain: although India’s raucous news media have brought down many a powerful
person and institution, Mr. Ambani and Reliance are rarely the subjects of
hard-hitting Indian reporting.
Reliance disagrees,
regarding itself as the target of relentless media attacks. “There is
malicious and negative stuff being written all the time. So where is the
influence?” the Reliance spokesman said. “Mr. Ambani has told me that he
will never pick up the phone and talk to the owner of a publication to say,
‘Write positive stuff’ or, ‘Stop writing negative stuff.’ ”
IN the old days, if Mr.
Ambani had anything to tell his father, it was done in the quiet, diplomatic
way that an older generation expected. Now a father himself, he has found
his own three children blunter. His teenage daughter, for example, questions
her father’s environmental record. “I think that all this is great,” he
remembers her saying of his vast empire. “But you know, you should be
careful. You are in the plastics business. It’s not one of the greatest. It
pollutes a lot. I’d like you to re-evaluate your portfolio.” Recounting the
episode, he laughs, because, with billions of dollars in that business, it
may be a little too late.
But Mr. Ambani is indeed
thinking beyond his current portfolio. One of the more intriguing ideas
swishing around is a quixotic plan for making India a rival to China in
manufacturing. The Chinese model consists of large factories in urban areas,
populated by millions of migrant laborers who produce goods at cheap prices.
Similar efforts have lagged in India, because it remains difficult to
acquire land from farmers here, because corruption hinders large
infrastructure projects, and because red tape remains so sticky.
Mr. Ambani’s vision is to
turn India’s weakness on its head. If manufacturing remains small-scale and
fragmented, let it stay that way, he says. “The next big thing is how do you
create manufacturing with decentralized employment,” he says. “The Chinese
have got very disciplined top-down systems. We have our bottom-up creative
systems.”
He mentions products like
handmade leather sandals from the Sugar Belt a few hours south of Mumbai,
tie-dyed Bandhani saris from Gujarat, artisanal pottery, clothes, jewelry
and the like. These wares would be produced in rural areas, sometimes in a
villager’s own home. Reliance would forgo manufacturing them and instead
teach residents what to make, gather the wares from disparate villages,
oversee quality and market and distribute the products.
This is yet another sense
in which Mr. Ambani, the most unlikely of Gandhians, is vaguely Gandhian.
Mr. Gandhi was famous for his passion for small-scale rural production,
symbolized by the spinning wheel. (It is, of course, unlikely that Mr.
Gandhi would have endorsed Mr. Ambani’s plan to profit on such goods.)
“How do you really bring
about, in a country of a billion people, the individuality of every single
individual?” Mr. Ambani asks. “How do you make sure that you create systems
that empower everybody and bring them to their true potential? This is what
actually Gandhi taught us.” “The optimistic part to me,” he adds, “is that
now these goals look achievable.”
Given such passions, why
not enter the political arena? “I think I can do much, much more in my
particular job,” he replies. |
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