The Billionaire Raj

by James Crabtree

  Such things were a sideshow next to the tycoon’s defining obsession with his new Jio telecoms operations, however. Mostly he pushed the project from Reliance’s headquarters in southern Mumbai, working from the same old-fashioned office his father used, and which the son was said to keep largely for sentimental reasons. But on at least one morning a week his armor-plated BMW 7 Series would slip quietly out of Antilia’s rear gate, turn left down Altamount Road, and head towards the horse-racing track that doubled as the city’s downtown heliport. From there a corporate chopper would whisk him off to Reliance Corporate Park, the company’s suburban campus in Navi Mumbai, a satellite city with a population of more than one million just off the eastern side of Mumbai’s peninsula.

  I took the same ride early in 2016, arriving at the racecourse one sunny morning, having been granted a rare foray into the heart of Ambaniland. The helicopter had golden seat belts, and the letters VT-NMA stenciled on its side, which an aide told me stood for “Nita and Mukesh Ambani.” I had been given a boarding pass before clambering aboard, with my name scribbled in blue ink. In the cabin I found another discarded on the floor, bearing the name Manoj Modi, who had taken the same chopper earlier that day. We took off in a whirl of dust, climbing straight up before accelerating off to the east, leaving the corrugated outline of Antilia behind in the hazy middle distance. For all of his influence Ambani had never managed to persuade India’s navy, which controlled the city’s airspace, to let him use the helipad on his own roof.

  Competitors viewed Ambani’s telecoms reentry with thinly disguised dread. One told me Jio’s launch would be akin to the bloody battles of the Mahābhārata, an ancient Sanskrit epic poem whose main characters tended to perish in combat. Thousands of engineers worked for years to perfect the service, which promised inexpensive smartphones and super-fast data connections, in a country used to basic mobile devices and crawling Internet speeds. Various executives explained its scale as I walked around the Reliance campus that day, a 500-acre site filled with modern glass buildings and huge dusty car parks. Reliance had laid hundreds of thousands of kilometers of fiber optic cables across India, one told me, as well as erecting ninety thousand new mobile phone towers. I was shown a desk in an open-plan area at which Ambani himself was said to sit, although it showed no sign of having actually been used. His elder son, Akash, had one nearby with a more lived-in feel: a Rubik’s cube sat discarded next to a framed photo of the Ambani family, while a pink poster of Andy Warhol was tacked to the desk’s backboard. The poster’s slogan read “The idea of waiting for something makes it more exciting,” which I took to be a tongue-in-cheek reference to Jio itself, given its launch had been delayed for the best part of five years.

  Ambani funded Jio with spare cash built up through his lucrative oil-refining operations, and liked to present the new telecoms venture as an almost public-spirited exercise in national digital development. This was just as well, given how few analysts thought he was likely to make back its estimated $31 billion in costs.33 “It is madness, complete madness, what this guy is trying to do,” the head of another telecoms group told me back in 2015, as the momentous scale of Ambani’s plans began gradually to leak out.34 Ambani himself talked about his aims in plainer language, promising a service at a price that ordinary Indians could afford. Indeed, when it did finally launch later that year, he offered it for free, beginning a violent price war with rival operators, who accused him of unfairly cross-subsidizing the new business with funds drawn from elsewhere within his empire. The free offer was a classic Reliance gambit, mixing naked populism with a willingness to endure hefty losses, so long as their competitors took a beating along the way. The deal proved understandably popular, winning Jio more than 100 million subscribers in just six months.

  I met Ambani on only one other occasion a few years earlier, sitting in his father’s old office in Maker Chambers, the old-fashioned downtown office building in which Reliance kept its headquarters. At the time his enthusiasm for Jio’s technological possibilities seemed almost boyish, as he demonstrated early test models of its handsets, showing off their ability to stream cricket matches and movies in high definition. The technical complexities of building the network seemed to excite his engineer’s imagination. Over the years his advisers badgered him to focus on his energy operations, using acquisitions abroad to turn Reliance into a global giant in the mold of Shell or Exxon. Ambani ignored them, spreading his business into ever more sectors and investing most of his money at home.

  This was partly a bet on India’s changing economy. The country was on “a journey from $2,000 to $5,000 per capita,” Ambani once explained, entering a new stage of economic development as a lower-middle-income nation, in which selling goods to a rising consumer class would become even more lucrative than building grand industrial projects.35 But more than anything the tycoon seemed to lust after the status of digital pioneer, and with it the uncomplicated plaudits won by the entrepreneurs of Silicon Valley. “I believe in the next twenty years as human civilization we will collectively achieve more than what has been achieved in the last 300 years,” he said at Jio’s launch in 2016, in a rather clunky attempt to echo the tech visionaries whose ranks he hoped to join.36

  Yet, try as he might, Ambani could never quite escape the questions that had hung over Reliance since his father’s time. A draft report from India’s government auditor, leaked to the press in 2014, examined how he had managed to get hold of the valuable telecoms spectrum he used to run Jio. The license had been won at auction initially by a tiny and previously little-known outfit called Infotel Broadband, which bid $2 billion, despite the company itself being worth just a fraction of that amount. Reliance then bought Infotel soon after the announcement of its auction success. Ambani’s company denied wrongdoing, but the auditors still raised questions about the process.37

  Anti-corruption activists also attacked the company. “Reliance bid through a benami bidder,” as political campaigner and lawyer Prashant Bhushan later put it, using the Hindi word benami to describe a transaction in which the ultimate buyer disguised its interest through a proxy.38 Reliance vigorously denied this too, arguing that it had broken no rules in buying Infotel Broadband. Bhushan launched an unsuccessful legal case to have the auction scrapped. Separately, the same auditor accused Reliance of enjoying a $500 million windfall when the government changed the rules governing how that same license could operate, allowing Jio users to make and receive voice calls on a network originally designed for data.39 For Ambani’s critics, both were examples of the way the tycoon maintained an unusual gift for getting what he wanted in New Delhi, just as his father had done before him.

  Such controversies were not limited to Ambani’s telecoms ventures. There were rows too about his energy drilling operations in the Bay of Bengal, where Reliance fought various battles over the regulated price at which it was allowed to sell gas. Government auditors also accused the company of claiming to spend more on capital expenditure than it actually had done, in order to win more favorable terms as part of the energy exploration contract it signed with the government.40 Reliance denied wrongdoing on this issue too, but that did not stop its owner facing further attacks during the 2014 election, as anti-corruption campaigners painted Ambani as the unacceptable face of Indian cronyism. Modi’s election proved no less complicated for the tycoon, as the new prime minister, fearful of accusations of favoritism, cut out much of the kind of insider access enjoyed by senior industrialists.

  Ambani tacitly admitted his company’s heritage of influence-peddling in a New York Times interview back in 2008. “We de-merged all of that,” he said half-jokingly, when asked about what the article called the “network of lobbyists and spies in New Delhi” established at first by his father—the implication being that these activities had been left behind when the business was split in two during the 2005 divorce.41 The suggestion prompted Anil Ambani to sue both his brother and the newsp
aper, although unsuccessfully.42

  Mukesh Ambani wanted to be viewed as the head of a modern, global enterprise; a professionally managed national champion and asset to India’s economic development. Some respected observers backed this view too. “Reliance Industries, once legendary for garnering political favors, has now moved to a higher plane,” economist Swaminathan Aiyar wrote a few years later.43 But the broader perception remained that Ambani wielded extraordinary political power. In private, competitors claimed to detect his hand in almost any regulatory misfortune that might befall them. Reliance did little to help its own cause, with a secretive culture and convoluted corporate structure designed to make its dealings impenetrable. In Mumbai I spent many unhappy hours trying to make sense of it all, sifting through the various shell firms and smaller businesses that circled around Reliance Industries—the company that owned that shattered Aston Martin, Reliance Ports, being just one example. Ambani paid eye-catching salaries to hire in high-profile foreign executives. But these global transplants tended not to last when the executives discovered the unseen inner workings of an entity dominated by old family retainers. Reliance’s governance was sketchy too, with its company board stacked with Ambani friends and relatives; “not a national champion but an embarrassment,” as The Economist once put it.44

  For all the suspicion he attracted, there was still something undeniably thrilling about Ambani’s ambitions. Around the time I watched his AGM speech the tycoon was midway through plowing the best part of $20 billion into new refining and petrochemicals plants. Reliance’s energy operations alone—which shipped crude oil into its giant facility in Gujarat and sent everything from diesel to kerosene back out—were among the most important engines for India’s new globalization, typically accounting for a tenth of the value of national exports each year. Yet it was the scale of Jio that remained especially striking. Here was the largest private sector investment in Indian business history, as well as perhaps the most cavalier in its disregard for future profits or shareholder returns. The business itself did well at first, as customers snapped up its early offer of smartphones with free super-fast connections. But Jio’s ambition posed a more profound question, namely: What was the point of being a tycoon if not to take just the kinds of wild risks that would intimidate more conventionally minded businesses—and perhaps, in the process, bring seismic change to industries or countries? The careers of the Vanderbilts, Rockefellers, and Carnegies had invited similar questions more than a century earlier, as they built the canals and railroads and steamships through which America grew. In their own eras all were pilloried as corrupt and avaricious. Over time, all have gradually been rehabilitated as masters of new technology and pioneers of industrial change rather than robber barons—the embodiment of what economist Joseph Schumpeter would later call “the perennial gale of creative destruction.”45 In time Ambani and his fellow Bollygarchs may come to be viewed in this way too, as the murkier details of their methods fade but the scale of their achievements remains.

  Yet behind this boldness there was also an unmistakable sense of fear. Ambani built his reputation above all on “execution,” meaning his ability to construct complex industrial projects quickly and cheaply. But with Jio he turned cautious, holding back the launch year after year. He tinkered to ensure the service was technically flawless, adding billions in expense at every stage. “He is obsessed with the idea that it should all work perfectly, on day one,” one executive told me during my visit to the Reliance campus. As best as anyone could tell, these delays hid deeper concerns about his own legacy, and also his relationship with his father. It was often remarked that Mukesh Ambani’s most successful businesses—in oil refining and petrochemicals—were inherited. Those he built himself, in areas like retail and energy, largely flopped. Leaving his own mark required that he launch a grand new project that was entirely his own, and one delivered at a scale fit to change the nation, just as his father had done before him. “People just don’t understand that for him this has to work. This is the big roll of the dice,” one adviser who worked closely with Reliance told me, not long before Jio’s launch. “So you almost have to expect him to behave irrationally, to spend any kind of money. Because he can’t afford to lose.”

  This was the special sense of vertigo that came from being the richest, most powerful, and most feared tycoon in India. “Money means nothing to me,” Ambani told an interviewer in 2017, at a moment when his personal fortune had recently soared above $31 billion. “My father used to tell me: ‘If you start anything just to make money, you are a fool. You will never make money and you will fail. All of us eat the same dal-roti.’ ”46

  Yet the risk of being surpassed remained real. Many of Ambani’s fellow billionaires saw their fortunes plunge as India’s once-booming economy slowed after the global financial crisis, and worries about graft paralyzed New Delhi. Some found themselves under investigation for corruption; a handful either went to jail or left the country. Nothing of this kind threatened Ambani, although on a few occasions he did come close to losing his own place atop the Forbes rankings. The more obvious and chastening example was his brother Anil, whose debt-saddled empire struggled in the decade after their split, pushing the younger man down into the lower ranks of also-ran billionaires. Some thought the elder Ambani a relic from an earlier era, and predicted his decline, as happened to America’s Gilded Age tycoons before him. Yet Ambani seemed determined to fight this very possibility, from the Pharaonic scale of his investments to the over-the-top grandeur of his family home. No one embodied so clearly the power of India’s new super-rich. And looking down from Antilia’s roof terrace—his own “pinnacle of moneyed magnificence”—no one else could grasp quite how far there was to fall.

  CHAPTER 2

  THE GOOD TIMES BEGIN

  Exile on Baker Street

  Smoke curled up as Vijay Mallya lit a fourth cigarillo, took a drag, and tapped the ash into a large white ashtray. It was a damp Friday afternoon in late spring 2017. Drizzle fell outside, obscuring the view of Regent’s Park over the road. Inside, Mallya sheltered behind a grand wooden table, a gold lighter and two mobile phones lined up in front of him. On the surface he seemed every bit the ebullient tycoon of old: a bulky man in a red polo shirt, with gold bracelets on each wrist and a chunky diamond ear stud sparkling against his long graying hair. But he grew downbeat as the afternoon wound on and our conversation turned to his business troubles and the state of his homeland. “India has corruption running in its veins,” he told me with a sigh. “And that’s not something one is going to change overnight.”

  We were seated on plush leather chairs in the study of his home, a Grade I–listed mansion on a terrace of Greco-Roman town houses, just a short walk from Baker Street Tube. It was the kind of place only the impossibly wealthy could afford, its interiors a vision of crystal chandeliers and ornate period furniture, with ceilings and staircases splashed in gold leaf. Qatari royals had bought a house at the end of the terrace for something close to £80 million a few years before.1 Various Rolls-Royces and Bentleys were parked along the mews at the rear. As I walked up earlier, a fat silver Maybach with the number plate VJM 1 idled outside Mallya’s back door. The door opened to reveal a guard watching a bank of security monitors fitted awkwardly into what appeared to be the old hallway cupboard.

  The study was large and paneled in dark wood, to match the table at which Mallya sat, checking messages on both phones as we talked. A glass of water stood next to him at first. A little later he pressed a white button next to his Café Crème cigarillo tin to summon the butler and order whiskey; the rear wall contained a drinks cabinet concealed behind a white and gold facade. Symbols of a rich man’s pastimes were scattered all around. A trio of supercar magazines lay on the desk by the window, alongside a series of model Formula 1 cars from the Force India team, which Mallya still owned. At one point I asked to be excused to visit the toilet. A flunky ushered me into a
golden bathroom, with a shiny gold seat to match its golden taps and loo-roll holder. Only the fluffy hand towels were white, although each still came embossed with the letters “VJM” in gold thread.

  Yet for all its opulence a sense of loss hung over the place, reflecting its owner’s status as an involuntary exile, the “Fugitive Vijay Mallya” as the Times of India often called him.2 A onetime billionaire brewer and airline magnate, Mallya reveled in his image as India’s “King of Good Times,” a slogan he adopted for himself from the labels of his Kingfisher beer brand. In his pomp he was ringmaster of his own circus: a bon vivant and hard drinker; a man of coteries and Gatsby-style parties and famously ill-disciplined timekeeping. Though his phones still buzzed often, the home seemed empty bar the staff: the security guard, personal assistant, butler, and chauffeur snoozing out the back. He seemed to have time on his hands too: only modestly late for our meeting, he chatted engagingly for the best part of three hours, rebuffing the various charges against him as he went.