Demonstrating that avarice often is thicker than blood, two fabulously wealthy Indian brothers are driven by rivalry and mutual hatred, writes Matt Wade.
If the world's 10 richest people stood shoulder to shoulder in order of wealth, two brothers living in the same house in Mumbai would be beside each other, in more ways than one.
Mukesh and Anil Ambani are ranked the fifth- and sixth-richest men in the world with fortunes totalling an estimated $85 billion - about 15 times James Packer's - and they cannot stand each other.
Forbes magazine's global rich list registers them separately because their wealth is not pooled. Rather, the world's richest brothers are feuding rivals who run separate business empires. Their long corporate battle has been "fierce, violent, cruel, bloodthirsty and savage", according to Alam Srinivas, an Indian journalist who for 25 years has covered the Ambani family company, Reliance Industries.
Sibling hostility has not halted the separate enterprises they run, thanks in big part to the booming Indian economy - four of the Forbes top 10 are Indian. But sources close to the brothers fear their acrimonious tussle could soon stunt their businesses and even harm the Indian economy by undermining investor confidence.
"So far the fight has not hurt shareholders [in Reliance companies] at all but it has reached a threshold where it could affect the growth of both groups," says one. "The message being sent the international investment community is to stay clear of these guys."
The brothers' father, Dhirubhai, started as a street trader in Mumbai in the late 1950s and built a company that eventually rivalled the clique of big businesses which had dominated India since the British Raj. His company, Reliance Industries, became a dominant force in India's textile and petrochemical industries and branched into an array of other businesses.
When Dhirubhai Ambani died intestate six years ago, Reliance Industries was one of India's biggest industrial conglomerates but without a clear succession plan. There was an immediate stand-off between the sons for the company chairmanship, and Mukesh prevailed. But late in 2004, Anil let it be known he could not work in his older sibling's shadow, and a bitter seven-month struggle ensued until Dhirubhai's widow, Kokilaben, brokered a deal to divide the empire between her sons.
Mukesh was given control of Reliance's core businesses including petrochemicals, oil and gas, refining, manufacturing and retail. Anil got most of Reliance's newer service businesses, including telecommunications, financial services and power.
Mukesh kept the name Reliance Industries Ltd (RIL) while Anil's share - about a third of the family stake - was named Reliance Anil Dhirubhai Ambani Group (RADAG). Despite their differences, Mukesh and Anil live with their families on separate floors of the same 18-storey house, Sea Wind, in southern Mumbai.
Insiders say they never talk and rarely cross paths, only partly because of the different hours they keep. Anil tends to get to work by 9.30am and puts in a 12-hour day. About three mornings a week he takes a helicopter to his offices at Reliance Communications in Navimumbai, a satellite city of Mumbai. Mukesh normally starts work at his downtown headquarters after 11am and finishes by midnight.
The family's living arrangements will soon change because Mukesh is building a vast house overlooking the Arabian Sea on Mumbai's exclusive Altamount Road. The Australian builder, Leighton Holdings, won the original contract and began construction but is no longer associated with the project. It is understood Mukesh's 27-storey house, to be named Antilla, will have a helipad, six-floor car park, a health club with a yoga studio, and an entertainment centre with a 50-seat theatre.
Mukesh's wife, Nita, reportedly arranged for an ice room where residents and guests can escape the Mumbai heat in a cool chamber "dusted by man-made snow flurries". Some estimates put the house's probable cost at up to $2 billion.
The extravagance of the house is in keeping with Mukesh Ambani's birthday gift last year to his wife - a luxuriously appointed Airbus 319 jetliner. This year he paid $112 million for the Mumbai Indians cricket team, which competed in the hugely popular Twenty20 Indian Premier League.
Anil's wife, Tina, a former Bollywood star, has also been shopping. She reportedly ordered a yacht for $49 million.
The Ambani brothers are vegetarian teetotallers who share a love of movies - but they have contrasting styles.
Mukesh studied chemical engineering and was a diligent technocrat. His father directed him to management of big projects. Mukesh has remained mostly behind the scenes but has taken a more public role recently.
The flashier Anil studied management at the renowned Wharton Business School in the US and was later given responsibility for Reliance's marketing and fund-raising. He developed a reputation for financial innovation, one of the hallmark's of Reliance's success.
Anil is well connected with Mumbai's glitterati and close to the family of Amitabh Bachchan, the Bollywood superstar. Anil has been linked with several Bollywood starlets over the years and married Tina Munim, a controversial actress with whom he has two children. His parents are understood to have opposed the union strongly.
Well before Dhirubhai's death, there were signs his two very different sons could not manage the Reliance empire together. But no one seems to have expected the rancour that now exists between them.
Alam Srinivas believes the animosity is so deeply rooted there is little chance of reconciliation. "These days the Ambani versus Ambani battle is more intense, more aggressive, more below-the-belt and more virulent than ever," he says. "This fight is unlikely to end."
Under the deal that split Reliance, each brother was prohibited from competing directly with the established businesses of the other for 10 years. But war was almost immediate. An early dispute raged over the price of gas that one of Mukesh's projects was meant to supply to Anil's Reliance Natural Resources at a fixed rate. The matter is in court.
This year the brotherly conflict has become especially bitter. In January, sharemarket traders suspected Mukesh associates of engineering an embarrassing 17 per cent fall in the share price of Anil's Reliance Power immediately after its initial public offering. It was the biggest fall so far in Indian corporate history. The charge is hotly denied.
In June, Mukesh in effect torpedoed a bid by Anil to pull off a complex merger with the South African telephone company MTN. "Ambani brothers at war again," said the Times of India headline.
Last month, the Ambani feud impinged directly on Indian national politics. The Government was seeking the support of several minor political parties after its parliamentary majority was tested when left-wing support evaporated over the decision to press ahead with a nuclear co-operation agreement with the US.
Amar Singh, a politician close to Anil Ambani, emerged with considerable government influence after his Samajwadi Party threw its weight behind the government. Mukesh Ambani and the Indian Prime Minister, Manmohan Singh, met just days before the parliamentary confidence vote, triggering speculation that Mukesh had sought assurances that his own interests would not be damaged and that his brother would get no special treatment.
"Now politicians have a real problem because they know both the brothers are equally strong," says Srinavas.
The family's single-generation rise from relative poverty to immense wealth is credited with inspiring a new generation of entrepreneurs, some now leading India's renowned information technology industry. "They have taught every other business house in India to think big and think globally," says Srinivas.
It is alleged also that the Ambanis pioneered brash and aggressive political lobbying to win commercial and regulatory favours. "Unlike other business families who would use their clout in a covert way, the Ambanis used it openly and brazenly," says Srinivas.
Suppression of The Polyester Prince, a book on Dhirubhai Ambani by the Herald journalist, Hamish McDonald, illustrates the family's clout. Published in 1998, McDonald's book is a rare study of one of emerging Asia's new tycoons. It also details the many allegations of corruption levelled against Dhirubhai Ambani during his rapid corporate ascent.
The Indian publisher, HarperCollins India, had the book printed and ready for binding but it pulled out when Reliance threatened to apply in each of India's 22 high courts for injunctions stopping publication on the grounds of anticipated defamation. The printed pages were soon pulped. The Australian publisher Allen & Unwin was not sued, and an updated edition is being written.
"They were scared off, essentially," says McDonald of the Indian publisher.
Mukesh Ambani does not deny Reliance exerts influence, but he plays down its importance as a business strategy. "I still think that's not a critical success factor," he told the New York Times in a recent interview.
One critical success factor for the brothers has been the stellar performance of the Indian economy. India's growth last financial year accelerated to 9.1 per cent after several years at about 8 per cent. Meanwhile, the giant Ambani businesses have lifted their share of that booming economy, accounting now for about 5 per cent of India's economic output, compared with 2 per cent three years ago. Before the conglomerate was split, its market value was $US22.5 billion; collectively, the companies are now worth $US170 billion ($181.4 billion).
The Forbes rich list, published in March, estimates Anil's personal fortune grew by $US23.8 billion - more than anyone else on the planet. He jumped from 18th to sixth during the year, while Mukesh's net worth jumped by $US22.9 billion.
Some believe the sibling fights are driven, at least in part, by rivalry over who gets higher on the Forbes list. "It is essentially a competition to see who can be richer," says a source close to the family.
Matt Wade is the Herald's New Delhi correspondent.
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