Anil Agarwal has lived in London for the past 15 years but the NRI chairman of the troubled Vedanta group can be at home anywhere. Maybe that is why it is hard to escape the notion that the billionaire, with a $70 billion empire, who started life as a scrap dealer, could easily pass off as a politician.
We're at The Qube, the trendily named multi-cuisine restaurant at the opulent Leela Palace hotel. Agarwal, a regular here when he's in town, chooses a table along the glass façade overlooking a Satish Gupta sculpture and a manicured green patch. He tells us he has read some of the earlier lunch columns and particularly liked the one with P Chidambaram. The finance minister was the group's lawyer before the United Progressive Alliance assumed office in 2004 and he subsequently recused himself from decisions involving the government's residual stake sale in Balco and Hindustan Zinc Ltd (HZL).
Vedanta had bought majority stakes in the two companies when the National Democratic Alliance was in power, but has been finding it hard to buy out the remaining government equity despite a clause in the share purchase agreements. Recently, the government started discussing the possibility of auctioning these residual stakes and Vedanta is ready with Rs 21,637 crore to make an offer. But Agarwal is clearly not happy with developments. "When the government was selling Balco, the mining reserves would have lasted five to seven years. We have increased production six to seven times and now the reserves will last 40 years. We have created value through new investment and technology," he tells us. Vedanta Group-owned Sterlite had bought 51 per cent in Balco for Rs 552 crore in 2001 and paid Rs 768 crore in all for 55 per cent equity in HZL the next year.
Acquisitions, in fact, have been a key part of his business strategy and Agarwal says whenever they get an opportunity, they evaluate assets that have room to create value. Acquiring Cairn India was one such move into a completely unrelated business.
Before we order the meal, Agarwal asks for orange juice, but changes his mind when we choose fresh lime. We chat about his early years when he decided not to go to the university after completing schooling from Patna's Miller High School. "I went to Mumbai instead," he recalls. "My father had his own business in Patna, but he knew my enthusiasm, so he did not stop me."
Those were difficult times for the private sector. Industry was a public sector-dominated but Agarwal says, his first break came with jelly-filled cables in 1988. "We collaborated with an American company and supplied to the department of telecom, which was the sole buyer," he reminisces. Agarwal takes a sip of his fresh lime, finds it too cold and starts taking out ice cubes from the glass at which point the waiter offers to get another glass.
For the meal, Agarwal seizes the initiative. "Get us the best you serve," he says animatedly. He orders green curry and vegetarian Thai phat noodles along with stir-fried vegetables. "Put snow peas, bok choy [a variety of Chinese cabbage], broccoli, French beans, asparagus and tofu," he instructs carefully. For us, he suggests fish. "It's nice," he urges, though how he, a vegetarian, would know is unclear. In any case, he is keen that we do not go without meat, so he orders chicken. "Not too many items but taste pura hona chaihye Asian (the taste should be totally Asian)," he instructs the waiter, and to us he suggests, "We can share."
Since he's playing the expansive host, we gently remind him that, in fact, it is we who are hosting him. We also tell him that we do not entertain requests for this column, it is by invitation only. Agarwal is intrigued and actually double-checks this with his corporate communication manager sitting nearby.
Since he's taken so much trouble with the meal, we ask him whether he eats out often. "I love food. It's entertainment. In London, there are good restaurants for Chinese, Thai, Japanese and Korean and we manage to carve out a vegetarian meal from them. And if we are still hungry when we get home, we prepare dal chawal!"
The conversation turns back to business. A member of the Marwari community and with a personal net worth of $ 3.5 billion, Agarwal likes to describe himself as a "small-timer from Patna" who made good on his own steam. His son, Agnivesh Agarwal, has his own business in Dubai, although he is also the chairman of Hindustan Zinc. "He runs a small business of metal recovery from scrap. He spent around $20 million and took three years; now he makes a million dollars, which is not bad."
His daughter Priya, though, is different. She works as a public relations professional with Ogilvy & Mather in London and is also a non-executive director on the board of Cairn India. "She wants to be in journalism or advertising," he says.
As the main course is served, we ask him about the many controversies surrounding his businesses and his alleged proximity to politicians. He answers elliptically: "We are the product of the [P V] Narasimha Rao government. He realised the importance of business and industry and undertook tremendous reforms."
The Thai phat noodles, essentially rice noodles, are bland, but the vegetables simmered in coconut milk, with its creamy richness, are filling. Throughout the meal, Agarwal manages to talk, eat well and ensure that we are served generous helpings. Perhaps he is used to hosting guests than being one. We ask him about the green lobbies who protested against his company in London and Orissa. "It can be reasoned that certain people don't want India to progress. It is up to us, we are a democratic country. We cannot do this in China," he replies.
Industry has to be responsible, he concedes, but all aluminium plants have technology that is 50 or more years old. "We have not even plucked a blade of grass and they are saying you are doing illegal mining. The fact is, we are bringing in new technology," he adds. "We don't want to displace people or create pollution, but when you set up an industry, some amount of both will happen. We have to do all that in a sustainable manner and give an adequate compensation."
He's referring to the fact that, a few months ago, Vedanta was unable to get approval for bauxite mining in the Niyamgiri Hills after 13 gram sabhas rejected the project. This, after the Supreme Court had ordered, in April, a referendum among the villages before mining starts.
This was a blow because his group has extensive investments in the region. In 2004, Vedanta Aluminium Ltd, an associate company for the project, signed a memorandum of understanding with the state government for bauxite supplies, of which 75 million tonne was to come from Niyamgiri. By 2006, a one-million tonne alumina refinery went on stream in Lanjigarh, about 15 km from the Niyamgiri Hills, at a cost of Rs 5,000 crore. Some Rs 35,000 crore was invested in a 0.5 million aluminium smelter and a 1,215 Mw captive power plant at Jharsuguda in Orissa.
When we tell him that the criticism against companies like his is that they make money from mineral resources here and invest abroad, he says, "Compared to the world, we are not even five per cent. There is market, resources and English-speaking people here. And the bigger picture is that there aren't even ten $10 billion companies in India, though there's potential for 100 to 200 such companies. The more businesses invest, the more value is created; the potential is tremendous. The government has to simplify processes."
And he adds for good measure, "Fifteen years ago, there was no comparison between India with Mexico and Brazil, but now they are 10 times bigger than us. We have to provide employment. We have to manufacture."
For a man whose businesses are mired in monumental controversies, Agarwal seems philosophical rather than burning with impassioned indignation. Maybe that's because he is familiar with setbacks. He recalls how, when he first went into business on his own, nothing he did would work for 10 years, from 1976 to 1986. "I must have shut down seven businesses before 1986. There were challenges of funding, experience and the market was not good."
Our lunch has taken up more than an hour-and-a-half and we decide to choose dessert from the buffet selection. As Agarwal helps himself to Indian sweets, he wraps up the conversation by declaring: "I am a happy man. A man from Bihar has come a long way." Which is one way of tackling adversity.