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Meet Larry Summers’s Ex-Boss, a Billionaire with a Blood Feud

If you judge a person by the company they keep, then Obama's top economic advisor has some serious splainin' to do.

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The mutually-assured destruction between the brothers hasn’t stopped there. Mukesh is being accused now of going back on a deal whereby the billions of untapped gas reserves he owns aren’t being sold to Anil’s power-generating business, because Mukesh wants a better price, and Anil refuses to pay that price. While India waits for Larry Summers’ ex-boss to stop fucking with his younger brother, India suffers power outages, and the country’s investment reputation is suffering.

But the most amazing twist to this feud took place a few months ago, when a helicopter mechanic working for Anil noticed during a pre-flight inspection that the gear box cap had been tampered with. The mechanic opened up the cap, and saw that someone had poured gravel and mud into the gear box. It was an obvious act of sabotage, and the most obvious suspect that everyone (but the police) looked to was none other than Larry Summers’ boss, Mukesh.

 

As the senior pilot in Anil’s company said, “Some persons, possible business rivals, were attempting to take away the life of Anil Ambani.” Calling it “clearly an attempt to murder” Anil’s pilot explained what would have happened if the sabotage hadn’t been discovered:

Shortly after taking off, the pebbles would have entered into the gearbox and would have caused midair loss of power,” which could have forced the grounding or crash of the copter, Mr. Joshi said.

Here’s where the story gets really creepy: an official police investigation was immediately opened, and the first thing that the notoriously corrupt Indian police did was rule out Mukesh as a suspect. Two days later, the mechanic who discovered the sabotage was hit by a train and killed.

Police claimed it was a suicide -- something the mechanic’s family has bitterly denied ever since. They noted that the mechanic was a longtime Army veteran and was “never depressed.” Moreover, in a note found in the mechanic’s pocket addressed to the police, the mechanic said had been visited by “three or four people from Reliance” but that “I didn’t tell them anything.”

Anil wisely stopped flying helicopters that day, and fired the helicopter maintenance firm. Good for Anil, but bad for older brother Mukesh, who can’t close his multi-billion-dollar gas deal at the price he wants, and bad for all of India, suffering power shortages, blackouts in New Delhi, and the loss of billions in foreign investment due to the fear of getting caught up in the brothers’ feud.

The crux of the problem over the billions of untapped gas reserves in the Sea of Bengal comes down to that 2005 agreement the two billionaire brothers signed with their mother. Now if you remember the AIG bonus scandal in March of this year, Larry Summers’ main argument was that contracts have to be respected. Too bad Larry’s ex-boss doesn’t feel that way -- the agreement signed between Mukesh and Anil in 2005, sealed with their mommie’s approval, mandated Mukesh sell his Indian gas to Anil. But Mukesh changed his mind over the price he was willing to sell it to Anil for -- Mukesh decided he wanted Anil to pay twice the agreed-upon price. And Larry’s ex-boss won’t sell the gas to Anil unless he gets that price. Period. Given that the World Bank ranked India 180th in the world in enforcing contracts–only Benin ranks lower–it’s not surprising that mere “rule of law” isn’t enough to resolve the dispute. Nope, it’s all down to sabotage versus Bollywood melodrama, as Anil recently squirted for the media in a “how could Mukesh do this to his own mother?” offensive earlier this month:

 
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