QPR Report Twitter Feed

Saturday, September 13, 2008

Lakshmi Mittal and His Involvement With QPR

-
Financial Times/Peter Marsh - Lunch with the FT: Lakshmi Mittal

It is a scene that stirs the imagination. A few months ago, Lakshmi Mittal invited to dinner at his palatial home – a neo-Palladian mansion in Kensington – the full playing squad of Queen’s Park Rangers football club, of which Mittal became a part-owner last year. “We had 50 or 60 people at home – the team members and their wives or guests,” Mittal tells me. “They were very happy that they are respected, they are encouraged. I told them, ‘We are not going to just spend millions and millions to buy top-notch players. We are going to be very selective and encourage teamwork.’”

Details of Mittal’s effort to boost morale at QPR – a far from glamorous club that is in the UK’s second-tier league – emerge from a relaxed lunch with the Indian metals magnate in London. This is an event I had been trying to arrange since 2005. Although I have interviewed the billionaire main owner of ArcelorMittal, the world’s biggest steel company, on numerous occasions, this is only the second time I have shared a meal with the man, who guards his privacy and is famously reluctant to open up to journalists.

Even when Mittal agreed to meet for this lunch, the choice of venue was endlessly picked over. A range of possibilities – including meeting in Mittal’s favourite curry restaurant in India, or the slightly whimsical idea of chatting at a tea bar in a London football stadium – were considered, before we settled at his request for a simple lunch in front of Mittal’s desk.

It is a downbeat setting, with his office in a smart Mayfair block looking out over nothing more resplendent than a brick wall, and with few of the executive trophies that sometimes litter such places. In spite of this understatement, the 58-year-old billionaire is one of the world’s best-known business people. Indeed, since Mittal Steel’s protracted takeover of the Luxembourg steelmaker Arcelor in 2006 – one of the biggest corporate spats in Europe in memory – even the smallest pronouncement from Mittal has become front page news, while in India he is lionised for showing the rest of the world what its inhabitants are capable of.

Against the normal tradition of “Lunch with the FT”, Mittal is paying for today’s meal. However, that does not seem inappropriate, given that he is the world’s fourth-richest man, according to Forbes magazine, with a fortune estimated at $45bn. Most of this is derived from his 44 per cent shareholding in his company, of which he is also chairman and chief executive. Mittal has built up this company – which is three times bigger than its closest rival – from virtually nothing over 30 years. This, plus the fact that steel was, even a decade ago, considered by most commentators a business graveyard, makes the scale of his corporate rise unparalleled.

The link with QPR, an underperforming London club, might seem surprising. Last December Mittal bought a 20 per cent stake in the club after being introduced to it by two of his friends – Bernie Ecclestone, the Formula One racing supremo, and Flavio Briatore, managing director of Renault’s F1 team, who were co-owners.
Mittal played football in his youth and loves a challenge. He did not need much persuasion to get involved, installing on the club’s board Amit Bhatia, his son-in-law. He watched the team five or six times last season, Mittal says, and in the new season hopes to be a regular, especially as parts of the club’s modest west London ground have been refurbished, complete with a plush new box for directors and their guests.

Our starters – bean curd with pancakes – have arrived. Some of the food has been cooked in-house, while the rest, including the pancakes, has been ordered from Kai, a famous Chinese restaurant near Mittal’s offices. “The owner is a friend of ours, we told them we have a very special guest,” says Mittal. “Normally, they don‘t do take-away but today they make an exception.”

When Mittal says “ours” or “we”, he is normally referring to his immediate family, which includes his wife Usha, his son Aditya and daughter Vanisha, and their spouses. Aditya, in his early 30s, is Mittal’s main confidante in the company as chief financial officer. And Mittal rarely takes action without the approval of Usha, whom some regard as having almost as big a behind-the-scenes influence on ArcelorMittal as her husband.

The paintings in his office, Mittal says, have been largely chosen by her. One is a fairly nondescript painting of Blackfriars Bridge in London and the other an abstract that Mittal says he likes because a portion of it reminds him of a lump of steel. The other pictures – small watercolour scenes of India – are the work of his daughter Vanisha when she was a girl. They are charming but might be more suited to the choice of a middle manager in a bus company rather than a corporate titan.

As we tackle the starters – I also opt for a glass of white wine; Mittal at first declines to join me but then orders one alongside his Diet Coke – I try to steer the conversation gently away from the mundane. It turns out Mittal got to know Ecclestone after buying his Kensington Palace Gardens house from the F1 chief in 2004 for £57m. But Mittal’s interest in car racing goes back further. He has been going to Grand Prix events for 11 years, since he started living in London, after shifting his family home from Indonesia. Racing was something he indulged in, along with football and cricket, as a student in Calcutta in the late 1960s. “What we had then”, Mittal recalls, “was far from Formula One. We had old-style cars – modified Ambassadors – which myself and my friends used to race around a deserted airstrip. I still have some of the trophies from those days.”

His father Mohan ran a small steel business. Inspired by this but splitting away completely in a business sense from his father in the mid-1970s, Mittal slowly made his own way in the industry. He developed from a small plant in Indonesia, before moving into Europe in the 1980s, central Asia in the mid-1990s and the US in 1998 through the acquisition of Inland Steel. Today, Arcelor-Mittal has plants on six continents and more than 300,000 employees.

As the main course arrives – noodles with spinach and a very tasty sauce – I inquire how Mittal looks back at his remarkable rise. “The biggest happiness I felt in my life was the day in 1980 when I had my first $1m in the bank, a result of the Indonesian business. After that, everything has become normal. Fundamentally I have not changed, I still remain the same person who still has the same values, whether it is the family values or work values. Nothing changed in my lifestyle or in my business approach.”

His values, Mittal says, boil down to hard work, a global approach, surrounding himself with capable and loyal people, and relying on his family for advice. He plays down the significance of material wealth. “I have a very comfortable life. There is a big change from where I started in my career and it is very satisfying.”

As the conversation is getting a little threadbare, I feel I have to try another tack. Does Mittal feel that being Indian might have helped him in his career, particularly through the apparent ability of many people from India to get on well with those from different backgrounds? This appears to strike a chord. “India itself is a place of so many cultures and so many different languages and classes. From north to south you can see a big difference in terms of education, standard of living, that definitely helped. You become much more open to working with different cultures. In ArcelorMittal it was very important for me to convey that we have no taboos of nationalities or culture. We respect talent and skills.”

Mittal supports several philanthropic projects – particularly Indian education trusts – but this has been little publicised and on a lesser scale than some might expect. Does he ever feel tempted to follow the examples of Warren Buffett and Bill Gates, who have diverted tens of billions of dollars of their wealth to charitable operations?

Mittal does not seem to mind being quizzed on this (unlike a question about whether he is buying up other houses in Kensington Palace Gardens, as some reports have suggested, which he says he would prefer not to answer). “We are doing [charitable] work in our own way,” he says, cautiously. Without making a big thing about it, I say. “Yes, I would say that.” Then he becomes firmer. “But it is not enough what we are doing, and the family is constantly discussing this. We owe a lot to this world. We have been successful but we need to do more.” I ask how much Mittal does give away, and he seems not to know, or perhaps he does not like to say. He makes the quite reasonable point that the real issue is “not how much; it‘s the where and how. We are evaluating different opportunities.”

Since I have intruded into one fairly personal area and got something useful, I think I should try a similar question. During Tony Blair’s tenure as prime minister and leader of the Labour party, he and Mittal were friends, and he was a big donor to the New Labour cause. Since Blair stepped down last year there has been no sign of further support. What’s happened to his relationship with the Labour party? With Blair, it transpires, Mittal retains regular contact. “Yes, we meet for dinner, we talk very often. I have always admired him. And for me, friendship is very important.” What about Brown, I ask, are you friendly with him, and are you giving him or his party any money? “No, no comments on UK politics,” Mittal laughs. “I’ve been totally warned against this [by his public relations adviser]!”

I sense it is time to move on to something lighter. As a bowl of fruit signals the meal’s imminent end, I return to sporting matters. Did he attend Wimbledon? Mittal says he declined corporate invitations for the tennis championships this year, preferring to watch the men’s final with his family in the ordinary enclosure on the centre court. “I was sitting in one of the back benches with a whole crowd. It was all very enjoyable and informal,” he says.

Which of the two players – Rafael Nadal from Spain and Roger Federer from Switzerland – was he rooting for? “I had to support Nadal. I have a business in Spain and that‘s a profit centre, but I have a home in Switzerland [in St Moritz, where Mittal takes skiing holidays] so this is a cost centre. On this occasion I had to align myself with the profits centre!” As I thank Mittal for his hospitality, I realise that with his choice of the Spaniard, as with his backing of the once-moribund steel industry, he picked a winner. I resolve to follow the fortunes of QPR a little more closely. Peter Marsh is the FT’s manufacturing editor.
.....................

The millionaires’ clubs

Lakshmi Mittal is not the first rich man to invest in a lower-league club with dreams of leading them to greater glory, writes Rebecca Seales

Elton John – Watford
The most high-profile backer is pop star Elton John, who became chairman of Watford in 1976 when they were in the fourth division, then the lowest tier of league football. He invested large sums in the club and helped take the side he had supported as a child into England’s top division and an FA Cup final before selling Watford in 1987. He returned as chairman in 1997 but stepped down for a second time in 2002. Though no longer the majority shareholder, he retains a financial interest in the club and raised an estimated £1.3m for Watford through a 2005 fundraising concert at the club’s Vicarage Road ground. The side were relegated from the Premiership in 2007.

Theo Paphitis – Millwall
Entrepreneur Theo Paphitis, best-known for his appearances on TV’s Dragons’ Den, became chairman of Millwall in 1997. He took the club out of administration and saw them win promotion to division one as league champions. Though they never made it to the Premiership, Millwall reached the FA Cup final in 2004 but lost 3-0 to Manchester United. Paphitis left the club in 2006, which is now in the league’s third tier.

Jack Walker – Blackburn Rovers
Like Mittal, Jack Walker made his fortune from the steel industry. Blackburn Rovers, one of the founding members of the Football League, were languishing in the old second division when he became chairman in 1991. Walker poured millions into the Lancashire club and was rewarded with promotion to the top tier. With Alan Shearer as the star striker and Kenny Dalglish as manager, Blackburn won the Premiership in 1995 – their first league title since 1914. The club were subsequently relegated but returned to the Premiership in 2001, a year after Walker’s death.

Dave Whelan – Wigan Athletic
A former professional footballer with Blackburn Rovers, Dave Whelan took over as Wigan chairman in 1995, when they were struggling in the league’s lowest division. His pledge to take them into the Premiership was widely ridiculed at the time but, on the back of money from his JJB Sports chain of shops, he achieved his aim in 2005. Whelan also used to own the Wigan Warriors, the most successful team in the history of rugby league. - Financial Times

Blog Archive