When brilliance and greed converge

Book review of The Key Man: How the Global Elite Was Duped by a Capitalist Fairy Tale

Every private equity (PE) contract specifies who the key men are and elaborates in detail the consequences of their incapacitation, removal or exit in a specific eponymous clause. In the current instance, The Key Man is a riveting account of the intertwining of brilliance and greed. It is the story of Arif Naqvi, the founder of Abraaj Capital, and how he managed to fool with his unvarnished brilliance the best and the brightest into believing in his “mission” that doing good and being profitable via private capital are not necessarily mutually exclusive. I encountered him at the World Government Summit in 2016 and there was nothing in his demeanor that made one even remotely do a hygiene rethink about him.

The book chronicles a journey in which he hired some of the brightest in the world to work for him and do a few good deals — but many more duds. In many ways, Abraaj was the institutionalised version of what was going on at individual deal/partner level.

It is a small exaggeration to say that many general partners of even prominent PE firms in emerging markets indulge in the illegal practice of taking kickbacks from dubious promoters (“Day Zero carry”) in return for investing in well-known dubious companies by dressing up their financials via the willing hands of the Big Four firms. These deals go largely unnoticed because the PE model broadly works on the principle of two or three blockbusters making up for seven or eight duds in any portfolio. But then, clever, unscrupulous partners ensure that the duds are duds for the firm, but not for them personally.

Mr Naqvi’s Abraaj did just the same. His brilliance was not in his choice of investments or in his ability to keep taking money from Peter to pay Paul — many of our businessmen are investors of that model — but in his ability and passion to conceal his greed so that not even the best minds in the world —across Western governments and corporate leaders, including Bill Gates —were able to catch on. It speaks volumes for the innocence of the due diligence done by Limited Partners (LP), and their agents to overlook the repeated malfeasance and systematic siphoning of money by Mr Naqvi and his trusted few to keep his vanity-propelled lifestyle and global reputation intact — all in the name of the greater public good.

The Key Man: How the Global Elite Was Duped by a Capitalist Fairy Tale

Author:  Simon Clark & Will Louch

Publisher: Penguin

Pages: 352; Price: Rs 799

It took one inquisitive mind at the Gates Foundation, Andrew Farnum, whose relentless questioning brought the Abraaj empire to its knees. Also, due credit to the publishers and owners of The Wall Street Journal,  who fell prey to any kind of benevolent “sponsorship” or advertising,  for allowing Simon Clark and Will Louch to go after Mr Naqvi till they nailed him. The book should be a mandatory read at all schools of journalism and business schools, for it is a rare tour de force  from which both can learn.

The book traces Mr Naqvi’s journey from his early days in Karachi to his attempt at buying over Karachi Electric along with the Chinese, by bribing Nawaz Sharif’s family, and leaves open the tantalising question as to whether the deal was indeed scuttled by the Americans to prevent the growing influence of China in the region. Had it gone through, would Mr Naqvi have ever been caught? Ironically, it was the obduracy and much-maligned red tape of the Pakistan bureaucracy to move the deal that finally also helped catch Mr Naqvi out. This account is peppered with interesting and bizarre anecdotes of Mr Naqvi’s megalomania, twisted personality and eccentric behaviour. For example, when he makes an Indian employee strip naked waist up and throws his clothes off a skyscraper in Dubai or his flashes of generosity when he doesn’t charge for the uses of the company’s private aircraft to save another employee’s life, or how he showed up uninvited at a colleagues parent’s funeral in another country and won him over.

There is no gainsaying that if Mr Naqvi’s manages to survive US attempts at extradition he will re-incarnate as Pakistan’s finance minister (given his close friendship with the regime there), in which case it would be impossible to bring him to justice.

I predict that a visionary creative leader such as Reed Hastings will grab this wonderful, unputdownable book on the convergence of brilliance and greed, and create a Netflix original out of it, for the story is both true and deserves to be told and retold. I foresee The Key Man winning several accolades globally, though one can’t say how much of an impact it will have on other key men to change their behaviour — which is far harder to do.  

The reviewer is an IAS officer. Views are personal