I'm guessing this one will put me at the top of the India-bashers list for a few days.... Not to mention winning me a few friends among the rich and powerful.
Where Blood Runs Thick
By Jason Overdorf
(Newsweek July 21, 2008)
For some time now, Indian firms have been growing in competitiveness; companies like Tata, Reliance, and the Aditya Birla Group now rival giant Western multinationals like General Electric and Procter & Gamble. The conventional wisdom has also been that Subcontinental powerhouses are getting more sophisticated. Management is becoming more professional, too; bullish analysts point to the recent merger of Ranbaxy (India's largest drugmaker) with Japan's Daiichi as a sign of a new willingness among India's CEO scions to move beyond the walled garden of family firms and team up with smart outside companies.
Now a very public fight between Mukesh Ambani's Reliance Industries Ltd. and Anil Ambani's Reliance Anil Dhirubai Ambani Group—the billion-dollar refineries to telecoms rivals created when the brothers divided the family assets after a soap-opera-style split in 2005—underscores how much work remains. The brothers are battling over Anil's planned merger of his Reliance Communications unit with South Africa's MTN Group, which would create one of the world's ten largest telecoms companies, worth an estimated $70 billion and with 116 million subscribers worldwide. Mukesh has effectively stymied the deal by invoking his right of first refusal on any sale or transfer of Anil's shares in the company.
Nor are such tantrums limited to the Ambanis—many family-owned Indian monoliths still favor insider deals, hire relatives over better-qualified outsiders, squabble unproductively, and ignore independent directors' advice, according to a managing partner at a private-equity company that invests in such firms. The bottom line: don't look for the next Jack Welch on the Subcontinent any time soon.