The Billionaire Raj Read online

  Copyright © 2018 by James Crabtree

  All rights reserved.

  Published in the United States by Tim Duggan Books, an imprint of the Crown Publishing Group, a division of Penguin Random House LLC, New York.

  crownpublishing.com

  TIM DUGGAN BOOKS and the Crown colophon are trademarks of Penguin Random House LLC.

  Simultaneously published in the United Kingdom by Oneworld Publications, London.

  Library of Congress Cataloging-in-Publication Data is available upon request.

  ISBN 9781524760069

  Ebook ISBN 9781524760083

  Maps by Robert Cronan of Lucidity Information Design, LLC, based on maps by Sriparna Ghosh, tiffinbox

  Cover design by Elena Giavaldi

  Cover photograph by Bharat Sikka/www.timeincukcontent.com

  v5.3.1

  ep

  To my parents

  CONTENTS

  Cover

  Title Page

  Copyright

  Dedication

  Map

  PROLOGUE

  INTRODUCTION

  PART I: ROBBER BARONS

  1: AMBANILAND

  2: THE GOOD TIMES BEGIN

  3: RISE OF THE BOLLYGARCHS

  PART II: POLITICAL MACHINES

  4: INDIA MODIFIED

  5: THE SEASON OF SCAMS

  6: MONEY POWER POLITICS

  7: CRONYISM GOES SOUTH

  PART III: A NEW GILDED AGE

  8: HOUSE OF DEBT

  9: THE ANXIOUS TYCOONS

  10: MORE THAN A GAME

  11: THE NATION WANTS TO KNOW

  12: THE TRAGEDIES OF MODI

  CONCLUSION: A PROGRESSIVE ERA?

  Notes

  Bibliography

  Acknowledgments

  PROLOGUE

  It was a sunny December day when I found it, abandoned outside a Mumbai police station and draped in a dirty plastic sheet. The silhouette revealed the outline of a car, low to the ground and beaten out of shape. A chunky black tire was propped awkwardly against the chassis. Thin white string tethered the sheet to a telephone pole, although this did nothing to stop me lifting it up and taking a peek below.

  The scene underneath was a mess. A tangle of metal erupted from the driver’s side. The bonnet was bent across the middle, pushed up by a violent impact. Broken tubes stuck out from the engine. Through a shattered windscreen I could see cramped rear seats, once plush red, now filthy and covered with dust. But the passenger’s side was in better shape, revealing the classic lines of an Aston Martin Rapide, one of the world’s most expensive supercars.

  The vehicle had met its demise late at night a few weeks earlier, in an incident whose mysterious aftermath stuck long in my mind as an exemplar of the power of India’s new super-rich. It had been roaring north up Pedder Road, a dual carriageway that separates two wealthy sections of the country’s financial capital. To the left was Breach Candy, a plush enclave of residential towers offering pleasant views over the Arabian Sea. Narrow lanes to the right led up to Altamount Road, where colonial-era mansions hid behind high walls and iron gates.

  It was roughly 1:30 a.m. when the Aston’s driver lost control, rear-ending another car. Jolted by the impact, the second vehicle, an Audi A4, spun onto the opposite lane and clipped an oncoming bus. A collision with a third car then crushed the Aston’s front end, sending it skidding across the road, where it crumpled to a halt in a whirl of smoke and glass. No one was killed, but as her Audi came to a stop, Foram Ruparel—a 25-year-old business school student, who had driven south earlier for dinner—realized she was in a fix. There were plenty of fancy cars in Mumbai, but Aston Martins remained rare. Anybody owning one had to be rich—really rich. And that meant trouble.

  What happened next is fiercely disputed. Media reports said the Aston’s driver first tried to flee in his crippled vehicle.1 Realizing it was too smashed-up to drive, he jumped into one of two Honda sports utility vehicles that happened to have followed him down the road. “In seconds, there was a swarm of security men around the car and they bundled the driver into one of the SUVs and sped off,” Ruparel told a local paper a few days later.2 The security detail zoomed back down the road, racing off in the direction of a house just a few minutes’ drive away.

  Although not visible from the crash scene, the building came quickly into view as they raced south. A giant residential skyscraper called Antilia, it loomed high above the street, an unavoidable symbol of the prominence of its owner: billionaire Mukesh Ambani, India’s richest man.

  News of the hit-and-run filtered out quickly the next morning, Sunday, December 8, 2013. The ruined Aston turned out to be owned by Reliance Ports, a little-known subsidiary of Ambani’s main Reliance Industries business, a giant conglomerate with interests stretching from oil refining and gas exploration to telecoms and television. Later that afternoon, Bansilal Joshi, a portly 55-year-old driver employed by the Ambani family, presented himself at Gamdevi police station, about two kilometers from the crash site. He had taken the car out for a late-night test drive, he confessed, and had been behind the wheel when it crashed. Then he fled the scene.

  Ruparel told a different story, at least at first. “I could see in the rearview mirror the car was moving at a high speed, weaving left and right. And then, in a flash, it hit my car,” she told one local newspaper. “I had a decent look at the driver’s face. He was a young man.”3 In the days after the crash, rumors spread that the young man may have been a member of the Ambani family, the country’s preeminent business dynasty. Yet over the next few weeks Ruparel had a change of heart. Towards the end of December, she signed a statement in a magistrates’ court claiming Joshi had been the driver after all.4

  The Reliance Industries account of what happened that night may very well be true. No one has been able to find out for sure. The police said CCTV footage of the moments leading up to the crash was inconclusive. Pedder Road is one of Mumbai’s busiest thoroughfares, teeming even late at night with roadside hawkers, pedestrians, and pavement-dwellers trying to catch a few hours of sleep on cardboard mats. Yet none of those at the scene caught a glimpse of the fleeing driver. India’s usually tenacious media covered the story with caution too. “While the cops have maintained a stoic silence so have most of India’s leading television channels,” a report in Forbes went so far as to put it later. In spite of the denials, the article even named a member of the Ambani family on the basis of rife “speculation online” that he “was allegedly involved in the smash-up.”5

  Curious to find out more, I called a company spokesman in the days following the crash. He told me it was perfectly normal for Reliance Ports, ostensibly a logistics and transport business, to own a sports car with a price tag in the region of $700,000.6 There was also nothing unusual, he said, in an employee taking such a car for a test drive in the small hours of the morning, or for him to be trailed by security vehicles. The company firmly denied that anyone other than Joshi, its driver, had been involved. In private, many of those I met over the following days were skeptical of elements of this story, although almost no one said anything in public. Omar Abdullah, the outspoken chief minister of the state of Kashmir, was one exception, tweeting: “If friends in Mumbai are to be believed, it seems the only people who don’t know who was driving the fancy Aston Martin are the Mumbai police.”

  Not long afterwards, I went to an evening reception in the seafront Taj Mahal Palace hotel, whose Gothic stone facade and pale red dome provide one of Mumbai’s most re
cognizable landmarks. Darkness was falling outside as corporate luminaries gathered beneath glistening chandeliers in the main ballroom. The lights of distant yachts glinted in the harbor. Talk turned quickly to the mysteries of the crash, although only after much conspiratorial glancing over shoulders. Reliance continued fiercely to deny any wrongdoing, but rightly or wrongly many of those I met seemed doubtful about the company’s version of events.

  Whatever the truth of the matter, the incident cast a revealing light on how billionaires were viewed in India. That evening, I found myself playing devil’s advocate. Both theories about what happened seemed questionable, I argued: the Reliance account of the late-night test drive on the one hand and the vague conspiracy and cover-up theory on the other. At one point at the Taj I told the head of a local bank that the Reliance story seemed the more likely of the two. He shot me a look with which I would soon become familiar: a combination of amazement and pity at the foreigner’s naïveté. I realized then the mystery of who exactly had been driving was not the real issue. Such was the mystique surrounding the Ambanis, and so comprehensive was the belief in their power, what mattered was that many believed they could, if needed, make such a scandal disappear.

  A few days later I went to Gamdevi police station to find out more. It was a dusty, chaotic old building, set back a few blocks from Chowpatty Beach and the Art Deco apartment blocks of Marine Drive, the city’s crescent-shaped promenade. Bored-looking officers napped on plastic chairs beneath slowly turning fans, guarding rooms filled with overflowing piles of paper. The inspector was out, one told me. He returned eventually and granted a cautious interview.

  “Where is the car now?” I asked.

  “It has been impounded. For tests,” he said.

  “And when will those tests be finished?”

  “It will take some time.”

  As we spoke, my mind conjured up a scene from the television series CSI, in which the Aston’s ruined body had been carried to a spotless warehouse somewhere on the edge of town, where experts in overalls and white gloves were conducting a careful forensic examination. It was only when I emerged blinking back into the sunlight that a silhouette wrapped in a gray sheet caught my eye, parked a short distance down the street. No, I remember thinking. It can’t be.

  Over the next year, I would stop by from time to time to see if the car was still there. It always was. The sheet got progressively dirtier, its top more deeply encrusted with bird shit. But the car beneath never seemed to have been touched. Sometimes I would stop by the police station and ask the officers how the investigation was progressing. “Ongoing,” they told me, a code word we both understood to mean nothing whatsoever was happening.

  Here was one of the world’s most expensive cars, belonging to one of the world’s richest men: a feared tycoon whom no sensible person would want to cross; a man whose power and influence, while enigmatic, was considered an inescapable fact of modern India. And so the car itself—an awkward reminder of events that early December morning—just sat there, ruined, fully wrapped, and half forgotten, as if all involved hoped they might wake one morning and find that a passing magician had whisked off the sheet and made the wrecked vehicle conveniently disappear.

  INTRODUCTION

  The Shadow of Antilia

  Nothing symbolizes the power of India’s new elite more starkly than Antilia, the residential skyscraper Mukesh Ambani built for himself, his wife, and their three children. Rising 160 meters in height, the steel and glass tower has a floor area roughly two thirds the size of the Palace of Versailles, although it stands on a plot of barely an acre.1 A grand hotel-style ballroom takes up most of the ground floor, fitted with twenty-five metric tons of imported chandeliers. Six stories of parking house the family’s car collection, while a staff complement in the hundreds caters to their needs. The upper levels feature opulent apartments and hanging gardens. A top-floor reception room, encased on three sides in glass, leads onto a giant outdoor terrace offering sweeping views down over the city. Somewhere below there is a health club with gyms and yoga studios. An ice room, a kind of sauna in reverse, offers escape from Mumbai’s fierce summer heat.2 Further down, in sub-basement 2, the Ambani children keep a recreation floor, including a football pitch and basketball court.

  Mumbai has long been a place of divisions: a tightly packed metropolis where the homes of tycoons and financiers cram in next to shanties, with corrugated sheets and tarpaulins for roofs. Antilia seems only to magnify this segregation, as if the building’s very excesses were designed to add yet greater stratification to a city already famed for its extremes of wealth and poverty. Even so, I came to feel a strange connection with the building, which provided a backdrop to my time there, right from the day I landed. My employer’s driver picked me up that morning in November 2011. We began the slow crawl south through blaring traffic, driving past slums leaning up against the airport fence and then down along the Sea Link, a short stretch of eight-lane motorway running alongside the city’s western flank. After an hour or so we crossed onto Pedder Road, passing the spot where the Aston Martin would later crumple to a halt. Seconds later my driver pointed excitedly through the windshield, as Antilia loomed out of the haze up ahead.

  Over the next five years the tower became part of the grammar of my daily life. Home to around twenty million people, Mumbai is a thin, teeming peninsula, a little like Manhattan in shape, with a series of arterial roads running up its west side. Beginning along the seafront at Marine Drive, these snake north along the coast, passing roadside shacks and elegant mansions along the way. My work as a journalist often took me along this route as I headed out around the city, passing twice beneath the shadow of Antilia: once on the drive north and once coming back south. In time I even warmed to its unusual cantilevered design, defending it to horrified visitors as if afflicted by an architectural variant of Stockholm syndrome. Much like New York’s Empire State Building, the tower provided a helpful landmark above the city’s choked streets, as well as a public testament to its owner’s extraordinary wealth, which at the last count stood at $38 billion.3

  This fortune made Ambani comfortably India’s richest person, but he was far from alone. In the mid-1990s just two Indians featured in the annual Forbes list of the world’s wealthiest, racking up $3 billion between them.4 That number then ticked up slowly, reaching five by the time Ambani took over his family’s businesses after his father’s death in 2002. But then an explosive expansion began, adding dozens more names over the remainder of the decade. Some transformed old family-run conglomerates into global multinationals. Others were first-generation entrepreneurs, accumulating billions in sectors from software to mining. Forbes ranked forty-nine Indians as billionaires by 2010, the year in which Antilia’s four-year construction finally wrapped up.

  Today, India’s most exclusive club has ballooned to over one hundred, more than in any other country bar America, China, and Russia.5 Together its members owned assets worth $479 billion in 2017.6 One level below them the country has 178,000 dollar millionaires.7 If you take billionaire wealth as a proportion of national output, the super-rich do best of all in Russia, whose powerful oligarchs are renowned for their lavish lifestyles and corrupt business dealings.8 But India now often ranks close behind, with a new super-rich business class sometimes jokingly dubbed the “Bollygarchs,” for their ability to bring together much the same mixture of industrial might and intimacy with power.

  The rise of the super-rich was propelled at first by domestic economic reforms. Starting slowly in the 1980s, and then more dramatically against the backdrop of a wrenching financial crisis in 1991, India dismantled the dusty stockade of licenses and tariffs that had protected its economy for a generation or more. Strict industrial rules controlling what could be made and by whom—a convoluted system sometimes known as the “License-Permit-Quota Raj,” or just “License Raj” for short—were scrapped. A clear-out began of companies
cosseted under the old regime, via deregulation, foreign investment and heightened competition. In sector after sector, from airlines and banks to steel and telecoms, the ranks of India’s tycoons began to swell.

  Yet this growth was also intimately bound up in a larger global story. The early 2000s were the heyday of the “great moderation,” a moment when world interest rates stayed low and industrialized nations grew handsomely. China entered the World Trade Organization in 2001, kicking off one of the most remarkable expansions of any country in history. Booming Chinese exports, along with the demand for commodities they fueled, boosted other developing economies, including India’s. Bullish investors flooded the emerging world with cash, spreading the fruits of what some dubbed a new era of “hyper-globalization.”

  It was in the mid-2000s that the fortunes of India’s tycoons really began to change. For all its drama, only a handful of sectors took off in the decade after 1991, including generic pharmaceuticals and software outsourcing. Over that ten-year period India’s economy also barely grew faster than it had in the previous one. But in the early years of the new millennium the twin impact of liberalization and hyper-globalization became impossible to ignore. Pumped up by foreign money, domestic bank loans and a surging sense of self-belief, industrialists like Ambani dumped billions into projects from oil refineries to steel mills. Others rushed to build toll roads and power stations, or spent heavily on Airbuses and broadband networks. Stock markets boomed. From 2004 to 2014 India enjoyed the fastest economic expansion in its history, averaging growth of more than eight percent a year.

  These boom years brought undoubted benefits, helping over one hundred million escape from poverty. Just as importantly, they began to reintegrate India with the rest of the world. The Indian subcontinent had been the planet’s largest economy for most of the last two millennia.9 Three centuries of colonial rule ruined that legacy, as the East India Company suppressed and plundered southern Asia. In the late seventeenth century, when Britain controlled just a handful of coastal cities, India’s Mughal Empire presided over close to a quarter of global gross domestic product. That figure stood at four percent when the last British troops left, not long after Independence in 1947, the final battalion marching out through the grand basalt arch of Mumbai’s Gateway of India, just down the road from the apartment in which my wife and I would later live.10 Yet even under the yoke of imperialism local merchants still sent plentiful cargoes to Liverpool and Manchester, while Indian capital coursed through the exchanges of the City of London. It was only after Independence that Jawaharlal Nehru, a cerebral Cambridge-educated lawyer and the nation’s first prime minister, began to abandon a heritage as a trading power that stretched back two thousand years.