Ambani’s vertical palace vs Premji’s horizontal giving
In a contest between who is the most celebrated Indian billionaire, a man who donates $2 bln to education versus a man who builds himself a $1bln home, the winner is obvious. Right?
The founder and chairman of infotech giant Wipro Ltd., Azim Premji, is India’s third richest man, said to be worth $17 bln. In one gesture, he has given away more than ten percent of his wealth to a fund for rural education. Surely such a generous donation is most noble and worthy?
And yet the act which has had the deeper impact on the public’s imagination is the recent show of wealth by India’s richest man, industrialist Mukesh Ambani.
Tongues across the world have been wagging for weeks, some in admiration, most in condemnation, about his controversial 27-storey apartment block built only for a family of five. It’s easy to dismiss his new home as offensive in a city where more than 60 percent of the population live in slums. But when was it never thus? Since time immemorial kings and queens – and in modern democracies the business elite are the rulers – have spent ostentatiously on imported marble, rare crystal chandeliers and gilded gold furniture for lavish palaces and private monuments.
So why the bemused uproar that India’s industrial king did the same? His is just a vertical palace – and without slave labour or tax-payer dollars. And he’s taken up less land mass than most mansions do and created an international architectural first, which is already an icon in India’s City of Dreams.
Why do we expect the uber rich to act the same as we do? Ambani is said to be worth $29bn and the suggested $1 billion price tag for his new home is about 3 percent of that, which is probably less than most of us spend on our housing. Also, I wonder how much his critics give to charity themselves? Yet we expect greater generosity from the super rich?
Forget journalistic ethics. The Radia tapes have wider implications
British press magnate Lord Northcliffe once stated: “News is something someone wants suppressed. Everything else is just advertising”. It’s interesting, then, that in a season of multi-billion dollar scandals that has seen India’s 24/7 news machine at its probing, questioning, investigative best, one — perhaps bigger and more serious than all the rest — has failed to make the hourly bulletins.
Taped conversations involving corporate lobbyist Niira Radia, anonymously leaked from a reported set of around 5,000 recordings made by India’s Enforcement Directorate and Income Tax authorities, appear to reveal the unholy nexus between India’s business leaders and the political policymaking machine.
But due to the embarrassing proximity that the Indian media elite have to the most controversial dialogues amongst her web of business, political and journalism sources, full-blown coverage has not been seen.
Save the outrage to the wall of silence seen on social networking website Twitter, only Open magazine, which first published the tapes last month and a handful of other publications have given column inches to the story.
However, the questioned journalistic ethics of NDTV’s Barkha Dutt and the Hindustan Times’ Vir Sanghvi that have dominated the minimal coverage and has led India’s media to circle the wagons are, in terms they are familiar with, details for the tenth paragraph.
Radia’s middleman role, and the potential fallout from her bugged conversations is suggested by the decision of Ratan Tata, chairman of India’s largest industrial conglomerate, to take the very public decision to petition the Supreme Court to stifle any further airing of the tapes.
And what would Lord Northcliffe say to that?
Third time’s the charm for Mukesh Ambani
(UPDATE: Reliance Industries has gained an overseas foothold by agreeing to pay $1.7 billion to form a joint venture with U.S.-based Atlas Energy. India’s largest-listed firm will pick up a 40 percent stake in Atlas’s operations in the booming Marcellus Shale)
The ruthless efficiency and smooth execution that marked Reliance Industries’ development of the world’s largest refining complex in western India and its vast gas fields off the country’s east coast has eluded the top-listed Indian firm during its recent attempts at overseas takeovers.
Nevertheless, Mukesh Ambani, the world’s fourth-wealthiest man and the chairman of Reliance, is known for his doggedness and is unlikely to backpedal on his overseas ambitions after being rebuffed by two overseas firms — bankrupt petrochemicals maker LyondellBasell and oil sands firm Value Creation.
A source tells us that Ambani now has his eyes set on the booming Marcellus Shale in the eastern United States, and wants to form a joint venture with Atlas Energy to develop the independent U.S. oil and gas firm’s operations in the gas project.
A deal could bring in more than $1 billion for Atlas, which will be a much smaller price than what Reliance was willing to pay for LyondellBasell, which was valued at about $14.5 billion by the Indian firm’s final offer. Lyondell rejected it saying the price was not high enough.
Analysts thought the exact opposite. They worried Reliance was overpaying for Lyondell, and were flummoxed about what synergies the company hoped to achieve by buying a bankrupt petrochemicals maker. In fact, investors in Reliance heaved a sigh of relief when the deal was called off.
Ambani seemed to have won even in defeat.
Forbes ‘most powerful’ list and the Indian connection
Prime Minister Manmohan Singh is among four Indians who share space with U.S. President Barack Obama and Chinese President Hu Jintao on the Forbes 2009 list of the World’s Most Powerful People.
Those who dominate the list were chosen based on the number of people they influence, their ability to project power beyond their immediate sphere of influence and their control of financial resources.
For Singh, a self-effacing economist who led a resurgent Congress Party to a landslide victory in the general election this year, the accolade is a reflection of how far he has come since his name was proposed as an obvious choice for the post of Prime Minister.
The Congress’ showing in the recent assembly elections in Maharashtra, Haryana and Arunachal Pradesh had set the trend for its performance in subsequent by-elections where it won 10 of the 31 seats contested.
The message was clear. Independent of the shackles of its communist allies, the party led by Singh (placed 36th on the Forbes list) is now free to aggressively push much-needed reforms.
Under Singh, the Indian economy grew at the rate of 6.7 percent in 2008/09 despite inadequate monsoons and a global slowdown.
Singh assured investors at the World Economic Forum of a seven percent growth next year and a medium term objective of achieving a growth rate of 9 percent per annum as the economic downturn shows signs of reversing.
India has its fair share of enterprising, self-made entrepreneurs and astute well-meaning politicians, some of whom are billionaires in their own right. Most of them have blazed a trail and continue to show amazing talents. In a country with widespread disparity between the rich and the poor, these individuals have become role models with so much to offer in terms of experience, wealth and benevolence. India is growing from strength to strength but the very poor need to evolve as well.
India’s richest man takes a pay cut
Mukesh Ambani has accepted a two-thirds cut in his salary in 2008/09 as chairman and managing director of Reliance Industries. His total compensation fell 66 percent to 150 million rupees.
The move comes just days after Corporate Affairs Minister Salman Khursheed warned firms against paying huge salaries to top company brass.
Ambani’s “desire to set a personal example of moderation in executive compensation” may be in line with the Congress government’s efforts to shore up public finances with an austerity drive of its own.
Excessive compensation has sparked outrage across the developed world after years of multi-million dollar bonuses paid out to executives, even at money-losing firms.
Politicians and policy makers have advocated curbs on these salaries, a theme echoed at the G20 meeting in September.
Ambani’s revised pay package is a far cry from the 440 million rupees he got last year but the salary cut is not seen as making too much of a dent in his wallet.
Earlier this year, Forbes magazine pegged Ambani’s worth at about $19.5 billion in its list of the world’s billionaires.
At least one corporate czar seems to have been of the same mind as Company affaires minister Salman Khursheed’s call of austerity in corporate salaries.
The prime minister though when asked recently about his observations made along similar lines said that he had just made a general observation and there was no proposal before the government as such.
So is that a good move?
In economics what is good for the individual may not be good for the whole. As Keynes explained if everyone starts being thrifty it may make the economy spiral downwards.
So if everyone follows Mukesh Ambani could it be good for the economy and society?
On the other hand is the argument that conspicuous consumption in an underdeveloped country encourages wasteful expenditure which should be used instead in asset building.
The proof of the pudding would be not how much Ambani has cut down but where.
Is the media going overboard in its coverage of the Ambani feud?
The war of words between the billionaire Ambani brothers took an unexpected turn when younger sibling Anil offered an olive branch to elder brother Mukesh in a bid to resolve a feud over the split of the Reliance business empire in 2005.
The widespread coverage the Indian media has given to the squabble between the brothers has led to a debate on social networking sites such as Twitter, with some accusing news organisations of playing host to a reality show or soap opera that stars the Ambani family to boost ratings.
Prominent columnist Vir Sanghvi wrote through his Twitter account virsanghvi: “Do you think some network should plan a reality show on the Ambani battle? Or are they doing it already on the news?”
But the battle between the billionaire Ambani brothers is not a manufactured product for mass entertainment, as it involves two of the world’s wealthiest men and could pose a stumbling block to India’s goal of achieving energy security.
The siblings have been involved in several disputes since the family business was split in 2005 following the death of their father, Dhirubhai Ambani, a legendary Indian business tycoon who built Reliance from scratch.
The latest of these disputes is over a deal for Mukesh Ambani’s Reliance Industries to sell gas to Anil Ambani’s Reliance Natural Resources at below-market rates as agreed in the 2005 family settlement, brokered by their mother Kokilaben.
The dispute has drawn in the government, which claims it is the rightful owner of the gas. The government can also decide who can buy gas and at what price, but it has been accused by Anil Ambani of supporting Reliance Industries.
all said & done, the name “reliance” tends to be anything but reliable…!
the media is, as well, trying to make delicious hay of trp rating while the feud goes on..on..& on.
the ultimate sufferer is alas the investor(s)-as always.
btw what was the govt doing until the brothers’ feud was heard in the court?
You are Right. It is just like Emperor’s clothes