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z Posted: Sun, Jun 15 2008. 9:48 PM IST

Indian to the core, and

an oligarch—meet the
‘Chairman’
Ambani says Reliance has never paid a bribe
or broken a rule. ‘These are all fables,’ he
says, dismissing the rumours

Anand Giridharadas / NYT

Mumbai: 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 jewellery 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 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,
Ambani is widely regarded as playing
that role, though in a very different
way. Like Gandhi, Ambani belongs to
a merchant caste known as the modh
banias, is a vegetarian and a
teetotaller and is a revolutionary
Conscience-keeper?: Ambani with thinker with bold ideas for what India
daughter, Isha, at an Indian Premier ought to become.
League match. She has questioned
Reliance’s environmental record Yet Gandhi was a scrawny ascetic, a
champion of the village, a sceptic of
modernity and a man focused on spiritual purity. 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 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 these are for
India’s benefit as much as they are for his sprawling company, Reliance
Industries Ltd.

“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

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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 ploughing 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; Ambani promises that it will funnel
money from the flourishing cities into the struggling agricultural heartland. He
envisions Reliance, with $39 billion (Rs1.67 trillion) in revenue, as providing
incomes to 12-30 million Indians within the next five years by buying from
farmers and employing new workers in its stores.

And as Mumbai, 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 harbour.
‘I personally think that money can do very little. And, this has been my
experience all across.’

Ambani, 51, who feuded with his younger brother 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 the 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 CEO of ICICI Bank Ltd and a long-time 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, Ambani is also known as someone who lets little stand in
his or Reliance’s way.

“Remember: these guys all grew up in the Licence 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 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 theatre, 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 favoured 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

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us and the millions whom we govern; a class of persons, Indian in blood and
colour, 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. 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’ 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 favours Hermes 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 soirees that attract Hollywood stars.

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 theatre. “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.

For 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 Ltd, 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
Ambani’s father, Dhirubhai, opened Reliance’s doors in 1958, the year after

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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 licences and creative manoeuvring around the bureaucracy.

Ambani and his younger brother, Anil, spent their childhoods in the
downmarket Bhuleshwar neighbourhood, 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
neighbourhood’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 Ambani would visit a neighbour’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 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,” 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 neighbourhoods. 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,” 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 Ambani enrolled in an MBA 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 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 Kamath, a lender to the Ambanis at the time.

Friends of 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

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there.

In setting up the yarn factory, Ambani also displayed the first glimmers of his
management style. The close friend who had spoken on the condition of
anonymity compared 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.”

As 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 cell phones. 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, ‘OK, 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 Rs80 crore”’ —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 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 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 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 younger brother Anil
control of Reliance’s newer service businesses like telecommunications,
electric power and banking. Mukesh got the portfolio of industrial businesses.

Today, both brothers are respected chief executives, though they are said by
friends to speak to each other rarely, if ever. Neither of the brothers publicly
discusses the relationship.

Anil Ambani, who friends say struggled to be taken seriously as 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.

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Ticking off one Indian problem at a time, 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 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—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.

However these challenges are resolved, some businessmen say 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 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, 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. Ambani routinely enters the office after 11am 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.

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Although rumours that it actively engages in bribery swirl around Reliance,

Ambani says it has never paid a bribe or broken a rule. “These are all fables,”
he says, dismissing the rumours.

But, he concedes that there are indirect ways for Reliance to curry favour.
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

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 favour 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 Ambani as a
friend. “They just do it better, with a combination of understanding,
relationships and a bit of cash.”

Ambani, however, disagrees with at least one element of 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.”

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 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 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.

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 demerged 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,” 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
Ambani, say the company has actively curried favour 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 Ambani, says Reliance maintains good relationships with newspaper

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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, 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. “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 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, 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 labourers 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.

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, jewellery 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 Ambani, the most unlikely of Gandhians, is
vaguely Gandhian. Gandhi was famous for his passion for small-scale rural
production, symbolized by the spinning wheel. (It is, of course, unlikely that
Gandhi would have endorsed 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?” Ambani asks. “How do you make sure
that you create systems that empower everybody and bring them to their true

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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.

©The New York Times/2008

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