193 (26.04.18)


EXCLUSIVE

Inside Agarwal's Mayfair Office

A small team of dealmakers working out of a basement in London have hit the headlines in recent months having scooped-up 21 per cent of Anglo American. “You know what, when you're buying stuff at a fraction of its value, you make out like a bandit.”

On Berkeley Street in London's Mayfair district, an Indian mining conglomerate, Vedanta, has a plaque marking its head office.
   The company produces $11.5bn of copper, zinc and electricity, paying out a record $1.2bn dividend in March. But the group's decisions are not made in its head office, but in the basement of a brick townhouse around the corner owned by Vedanta's chairman, Anil Agarwal, where a small group of M&A advisers put together his largest deals.
   Usually out of the spotlight, Agarwal's team of dealmakers have hit the headlines in recent months, having unexpectedly scooped-up a 21 per cent stake in mining giant Anglo American. Agarwal insists he has no plans to go hostile, leaving bankers and the press baffled about what his intentions could be. “He's a master,” one aide says. “This is a guy who started off selling pots and pans door-to-door. He is one of the most incredible men I've ever met.”
   Born in India, Agarwal began as a scrap-metal dealer in Mumbai, before bidding for a bankrupt copper cable company. He has since piled-up assets piecemeal, owning everything from aluminium in India to zinc in South Africa and Zambia.
   In public, Agarwal is smiley, diplomatic and fuzzy, saying he is “always very supportive” and happy with his investment in Anglo “for now”. In private he is detail-focused and does monthly zero-based budgeting, continually getting each of his businesses to justify every expense. “You know what,” an adviser says, “when you're buying stuff at a fraction of its value, you make out like a bandit.”
   Agarwal's cost-obsessed ethos, based on bidding for scrap, comes at a human cost. A chimney collapsed at one of Vedanta's operations in 2009, killing at least 40 people. Then a crane collapsed at one of its zinc mines last year, killing another four. Including contractors, the total is difficult to add up, but well over 100 people have

died at Vedanta's operations in recent years. Its CO2 emissions meanwhile go up even quicker than its revenue figures. Vedanta belched-out 53m tonnes of CO2 last year, triple the emissions of BHP, the world's largest mining company.
   Agarwal has repeatedly turned to big-ticket Western executives to spruce-up Vedanta's image, poaching Anglo American's former chief executive Cynthia Carroll and Rio Tinto's former boss Tom Albanese. But both recently departed and Vedanta has now turned to Srinivasan Venkatakrishnan, who was born in India, but has spent the last five years leading Johannesburg-based AngloGold.
   Though Agarwal is charming, staffers say, he is not the easiest man to work for, employing several CEOs across Vedanta's subsidiaries, often with overlapping remits. When Albanese tried to engage investment banks to advise on M&A strategy, he got back from a business trip to discover that everything in his office had been shifted to Agarwal's basement. “Oh your office has been moved Tom.” The message was clear enough.
   Agarwal's ambitions over Anglo American can be deciphered by looking at his family, insiders say. His daughter is “strong-willed” and exceptionally bright, but has zero interest in the mining business. His son, Agnivesh, 41, is chairman of Hindustan Zinc, one of Vedanta's biggest subsidiaries, but does not always turn up to board meetings and his real passion is Fujairah Gold, a refinery in a tax-free zone in the United Arab Emirates that is fed by small gold discoveries in Africa that will never move the needle for a group of Vedanta's size. “There is actually nobody to take over from Anil.”
   Agarwal is not looking to buy Anglo American, aides say, but to “find a home for this empire”, by vending Vedanta into a well-recognised, professionally-managed competitor. “Then once he's ready to hang up his boots, if that day ever comes, he knows his empire has a future.”

 

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