For Reddy himself, the ceremony offered a kind of social redemption: he had only recently emerged from jail, after he and his brothers had been accused of orchestrating a mining scandal, in cahoots with the state’s BJP-led government. Even the venue, the Palace Grounds at the heart of Karnataka’s capital, appeared designed to announce his return in the state his activities were claimed to have disgraced, and chide those in the city’s legal and political establishment who had once courted his friendship, then turned against him. Reddy’s celebration was just one particularly stark example of the way that elite weddings have become a focus for “competition, conservatism, and assertion of power,” according to Parul Bhandari, a sociologist who studies matrimonial culture.29 More often than not, it also seems no accident that the most over-the-top ceremonies tend to go together with the most insalubrious hosts, from the record-breaking wedding jamboree hosted by Jayalalithaa in Tamil Nadu, to the opulent party hosted for the 2004 marriage of the son of Subrata Roy, the head of Sahara group, in his palatial Lucknow mansion.
At one level these weddings are designed to showcase their host’s elevated taste and social sophistication. The best of them involve fancy destinations, from Goa to the historic cities of Rajasthan, where actress Liz Hurley married textile tycoon Arun Nayar in Jodhpur in 2007. Locations outside India are even more prized: Singapore, Mauritius, the Maldives, or even Paris for steel magnate Lakshmi Mittal, whose daughter’s wedding began with an engagement ceremony at Versailles, kicking off a week of celebrations estimated by one newspaper to have cost $39 million.30 Yet for the tycoons, these extravagant events play a further role, bringing the worlds of family and business together. Often enough the unions involve members of the same business caste, as happened with the Reddy wedding, where the groom was the son of a fellow industrialist from the same caste, and thus also called Reddy. The celebrations also often take on a corporate air: Gautam Adani’s wedding included a reception in Ahmedabad, to which thousands of Adani group employees were invited, and then another in Mundra, the township next to his port. And behind it all are displays of raw political power, as tycoons attend celebrations for the scions of political dynasties, and politicians grace gatherings for the children of business titans. From time to time Mukesh Ambani uses Antilia’s ground-floor ballroom to throw wedding receptions for favored relatives, drawing in hundreds of high-powered guests. “The main show of strength of any elite weddings is in its guest list,” as Bhandari put it. “Attendees reflect the power and position of the host.”
Coping with Downfall
All these glitzy weddings and extravagant new homes signaled the growing self-confidence of India’s business elite. “Those days of socialist values, where display of wealth put people off, seem to have become redundant,” as one writer put it, a few days after the ceremony for Reddy’s daughter.31 This was by no means unique: a new culture of bling stretched across major emerging markets, from the oligarchs of Russia to the new rich in China. Yet the need to demonstrate prosperity proved especially acute in India, a country where the gap between those who had it and those who did not remained so striking.
These displays also fitted into a wider culture, which Raghuram Rajan had once described as “relationship-based capitalism,” in which generosity and influence fused together: where employees and friends were looked after, and where those who were helpful to a company were rewarded in return. These traits could be admirable, as with venerable business houses like Tata and Birla, which enjoyed distinguished charitable records, running hospitals and funding civic institutions. But in less scrupulous hands this relationship-based system showed a darker side: a school scholarship offered to the child of an employee could also be handed as a reward to a helpful government official; a family charitable foundation, in addition to funding good causes, could also be used to funnel money to friends or business contacts. In India, this line between hospitality and influence was often ambiguous at best.
This was also often a matter of temperament, given that India’s tycoons were a generally charming and gregarious bunch. I was once invited for a drink at a mansion in Goa, belonging to billionaire Ravi Ruia, one of the two brothers who founded Essar, another heavily indebted industrial group. His company had an aggressive reputation, but Ruia was solicitous and easy to like, with a jocular energy that belied a man well past his sixtieth birthday. Perched on a hilltop overlooking the sea, his home stood just a few kilometers from Vijay Mallya’s Kingfisher Villa, and Ruia said the two families used to spend enjoyable days messing around on one another’s boats. Inside, the house was vast and ornamental, with a bar in black marble, and a music area just off the lounge, with a drum kit and keyboard, and expensive-looking art hung nonchalantly on the walls. The same habit of hospitality extended to the parties the family hosted in their main residence in Mumbai, a far larger mansion, with lawns overlooking the Arabian Sea and rooms sufficient to house the entire extended Ruia clan: the two founding brothers and their sons, along with their respective wives and children. Prashant Ruia, one of the sons, once told me the family made most of its business decisions around the dining room table, meeting regularly for lunch and dinner to hash out plans and deals.32
The elder Ruia’s conviviality seemed perfectly genuine, as if part of a culture in which showing kindness to friends and their associates, even those you didn’t know well, would turn out to be good for business. Much like other Indian industrial titans, the Ruias were proud of the projects they built, which included an ultra-modern oil refinery in Gujarat, just next door to Mukesh Ambani’s giant complex, as well as various other power stations and steel mills. Few businesses had grown more rapidly: Essar’s revenues rocketed from roughly $2 billion in 2005 to around $27 billion a decade later. The company snapped up steel mills from North America to Zimbabwe, as well as an oil refinery in Cheshire in northwest England, and for a time had a subsidiary listed on the London Stock Exchange.33 But that growth was also fueled by gargantuan quantities of debt—a cool $15 billion according to the second “House of Debt” report in 2013—which Essar struggled to pay back once it found itself hit by a mix of regulatory snarl-ups, project delays, and fluctuating commodity prices.34 The company had a history of precarious finances too. Debt defaults were virtually unknown in India, where banks tended to step in to provide yet more loans. But somehow Essar managed it when its steel division defaulted on a foreign debt repayment back in 1999.35
More to the point, it was hard not to conclude that the family’s instinct for hospitality extended far into its business affairs too. During the season of scams Essar found itself entangled in the 2G scandal, although they, like others involved in the case, were formally acquitted of wrongdoing in 2017 when a special court reported there was insufficient evidence to bring prosecutions. In 2015, the Indian Express published a trove of leaked internal emails, revealing that Essar had hosted Nitin Gadkari, a senior BJP politician, along with his family, aboard the Ruias’ yacht off the French Riviera.36 The same emails provided details of efforts to lobby officials, win favor from journalists and give jobs to friendly contacts. None of this was illegal, and Essar denied it had done anything wrong. But it at least suggested that, as conglomerates like Essar had grown, so their lobbying operations in New Delhi had become more sophisticated. A year after the leaks, the magazine The Caravan published an essay about the company’s operations, which claimed Essar was “better at managing the government than managing its finances.”37 Essar again denied wrongdoing and sued the magazine for damages, albeit unsuccessfully.
This same culture of influence was reflected in the kind of companies that Indian tycoons built. I lost count of the times business owners like Gautam Singhania told me their operations were family-owned but “professionally managed.” But more often than not, their senior executives were drawn from the same caste or region as the owners, and acted entirely as loyal family retainers. The company’s corporate boards tended to be stacked with w
ell-paid, elderly yes-men, again often drawn from the same business community. Foreign private equity groups that invested in Indian family-held companies often emerged shocked by their secrecy and opaque decision-making. Yet these habits made sense, making it hard for outsiders to exert influence, be they minority shareholders or anxious bankers, trying to recover money they now feared might never be seen again. The strategy worked, too: with only a very few exceptions even India’s most heavily indebted tycoons managed to keep control of their companies when they ran into trouble.
All that said, in the aftermath of the season of scams, a major change still came over India’s business houses, from which few emerged unscathed. To an important extent, the old relationship-based way of doing business stopped working. Attempts to win political favors in New Delhi were suddenly rebuffed. Politicians and bureaucrats became wary they might be accused of cronyism. The same was true with banks, where executives and managers felt less able to give out generous loans to friendly businesses, making it more difficult for those businesses in turn to raise new debt. Many tycoons found themselves in the unhappy position of being forced to dispose of assets, Essar included, which eventually sold off its prized refinery in Gujarat to a Russian oil company.38
It goes without saying that the tycoons did not recognize their image as peddlers of influence. Rather they saw themselves as entrepreneurs and nation builders and overcomers of obstacles that might hold back those of lesser abilities; men who could build projects and create wealth in situations where others would fail. Most denied they offered bribes. “I don’t think that payments per se work,” Mukesh Ambani once told the New York Times, when pressed on Reliance’s historic reputation for influence peddling. “I personally think that money can do very little…We believe in relationships.”
As I learned more about the inner workings of India’s conglomerates, I continued to be struck by the unique stresses they placed on their owners. Most obvious were the worries about money, especially for those with a record of imaginative financing. The most artful companies were said to keep two sets of books—one for public consumption and another entirely private document, to be kept within the family, which showed where the money had actually gone. Then there were concerns about the government, given the way politicians and bureaucrats could make life miserable for any business. The weaker a company’s finances became, the more its owners felt vulnerable to the whims of politicians, and they therefore behaved with even greater deference towards them. “They expect the industrialists to be there with folded hands and a suitcase, and to keep giving them money,” as one tycoon put it to me. This was never more obvious than at each annual government budget, when captains of industry would line up to praise measures unveiled by the finance minister. The next day’s newspapers would carry reports in which other business leaders would rate his efforts with fawning marks out of ten. Anything less than an eight was vanishingly rare.
Then there were the usual stresses of family control: the disagreements between fathers and brothers and sons, and indeed the intricacies of succession itself, as children jockeyed for control or, even worse, proved uninterested in it. Given the strains of running a family enterprise, perhaps it was no surprise that so many tycoons proved to be religious or superstitious.
The importance of faith was clear for Vijay Mallya, with his annual pilgrimages and temple donations. Narayanaswami Srinivasan, the southern Indian cement tycoon who presided over the body that governed Indian cricket, was also noted for his pious Hindu beliefs. Yet few could match Jaiprakash Gaur, the elderly founder of Jaypee Group, another overleveraged conglomerate and member of the “House of Debt” group, which built India’s first Formula 1 track, as well as one of its best highways, running between Delhi and Agra, home to the Taj Mahal. In meetings, Gaur often commented while simultaneously seeking blessings from one of the Hindu deities whose portraits adorned his office walls.39
This sense of anxiety among the tycoons was remarkable, especially given that it came from the class that Rana Dasgupta had described as warlike. Rather than relishing the battle, in the years after Modi’s victory, India’s business dynasties became uneasy, worried places. Their ups and downs were in one sense just part of doing business. The point of being a tycoon was to take risks. Big industrialists perennially took on excessive debts during America’s railroad frenzy in the 1870s, and then afterwards crashed spectacularly back to earth. But the psychological impact of these booms and busts on the tycoons themselves remained real. Many in India who had once invested fearlessly now lacked not just the funds to spend, but also the animal spirits too. The India bulls were not feeling quite so bullish.
Back in Angul, Naveen Jindal told me of how his own ambitions had changed. Once, he said, he had aspired to build a collection of steel mills and power stations as large as any his country had seen. Now his aims had to be more modest: to pay back what he owed, finish the projects he had started, and only then to begin to think of the future. At one point he told me he was even cutting back on his polo habit, for fear that his beloved sport would distract him from repairing his business affairs.
“We used to go all out, now we will be very conservative,” he said of the new attitude he shared with his fellow industrialists. Over the previous few years, allegations of corruption had swept through to every corner of the Indian economy, hitting not only the big industrial tycoons, but almost every other important institution, from the media to cricket, that most venerated of national pastimes. Set against this tempestuous backdrop, the sense of possibility and ambition that had characterized the 2000s had grown weaker too. “Right now I feel that is gone, although it might come back,” Jindal said. “People will learn how to be more prudent. I, for one, am going to be extremely conservative,” he added, before holding up his hands: “In India we have this idea that we come empty-handed, we go away empty-handed. These are challenging times.”
CHAPTER 10
MORE THAN A GAME
Operation U-Turn
Operation Marine Drive U-Turn began late on a humid evening in the middle of May 2013, just yards away from the Arabian Sea. Shanthakumaran Sreesanth pulled out of the main gate of Mumbai’s Wankhede cricket stadium a little before midnight. His team, the Rajasthan Royals, had lost that evening’s match in the Indian Premier League (IPL). But no matter: drinks were in order, and the star bowler sped off to join friends in a nightclub in Bandra, a fashionable northern suburb. He had no idea the police were following him. Or that they had been doing so for weeks.
Operation U-Turn took its name from the quiet cul-de-sac at the end of the city’s Marine Drive where a team of police officers waited as the game wound on, close enough to hear cheers floating over from the grounds. When it finished, three squads fanned out across the city. One trailed Sreesanth as he drove north. A few hours later the squad moved in, pulling the disorientated fast bowler from his car. Two more Rajasthan Royals players were arrested that same evening, while eleven bookmakers were taken in nighttime raids across the country. The most serious scandal in the history of India’s treasured national game had begun.
News of the arrests leaked out quickly, sending India’s cricket-crazed media into a mania by the time police commissioner Neeraj Kumar sat down at a press conference in New Delhi the next afternoon. A portly, balding man in a dull khaki uniform, Kumar seemed weary as he laid out the allegations. The many silver badges on his uniform glinted as the cameras flashed. “There was an agreement between the bookies and the players that in a certain over they would give away a minimum amount of runs,” he said; a scam known as a “spot fix,” in which a small part of a cricket match was rigged, allowing gamblers to bet on the outcome of that particular passage of play, but in which the result of the match as a whole was not necessarily affected.
Prearranged signals showed the fix was on, Kumar explained: a hand gesture here, a rotated watch there, or, in Sreesanth’s case, a towel t
ucked into his trousers as he sprinted in to bowl. The police released clips of the suspicious incidents, and suggested that bags filled with as much as $70,000 in cash had been the players’ reward. And somewhere, far beyond the stadiums, these seemingly innocuous incidents had apparently been the source of huge profits, by way of illegal bets laid by groups unnamed—high-rolling punters, shady betting syndicates, and international underworld criminals. “The mastermind is sitting abroad,” was all Kumar would say.
Right from the time of its launch in 2008, the IPL had been plagued by scandals. A self-consciously brash reboot, the two-month tournament rapidly transformed the image of cricket: from a game played by men in white over five long days, often ending in a draw, to a pulsating three-hour jamboree, where the players dressed in brightly colored kits and draws were impossible. Where matches were once watched politely by elderly men in half-empty grounds, now India’s cricket stadiums were filled with delirium for eight weeks each spring. Enthusiastic young supporters packed in to see the world’s biggest stars play alongside beloved Indian internationals, egged on by pitch-side cheerleaders and entertained by enough blaring music to drown out the gentle thwack of leather on willow.
Most important of all was the money, as the IPL tapped into a seemingly limitless demand to watch cricket among the country’s rising consumer classes, while providing a format perfectly designed for an evening’s television viewing. From time to time, India would play its neighbor and archrival, Pakistan, pushing the television audience as high as half a billion people.1 But prior to the IPL, the country lacked a high-profile, consumer-friendly league to meet that demand. In 2007, just before the first IPL tournament began, the organizers auctioned off eight city-based franchises for $723 million, selling mostly to big-name tycoons like Mukesh Ambani and Vijay Mallya, alongside a smattering of Bollywood stars. Billions more came from broadcast and sponsorship deals. Cricketers used to earning a pittance were offered minor fortunes for just two months’ work. But rather than just satisfying pent-up consumer demand, all that money created new temptations, as players, administrators and hangers-on alike realized what cricket was really worth.
The Billionaire Raj Page 28