The fifth floor office in Mumbai's Nariman Point is neat and well appointed. The reception area is small but, like the rest of the office, tastefully decorated. The slightly fading Colaba skyline is visible through the sheet glass windows at the far end. Two black computer consoles flicker in a corner as stock prices flash real-time on their screens. One can be forgiven for thinking it's the office of a well-to-do, mid-rung stock broker. Only, it's not; it is the nerve centre of The Chatterjee Group (TCG), a multi-billion-dollar private equity fund that has invested more than $2 billion (Rs 8,800 crore) in India alone.

Like his office, everything about Purnendu Chatterjee, the promoter and principal shareholder of TCG, is understated. As he rushes into the large conference room to the right of the reception area for the interview in shirt sleeves, he apologises profusely for keeping us waiting for seven-to-eight minutes beyond the appointed hour. It's hard to believe that this man recently participated in the largest international takeover ever by an Indian.

Ask him about it and he puts it in perspective. "We took it over as part of a consortium with Leonard Blavatnik's Access Industries," he clarifies. The details of the deal, though, are still hazy. It is believed that Royal Dutch/Shell and BASF finally chose the Chatterjee-Blavatnik consortium over National Petroleum Company of Iran, the other shortlisted bidder, as a result of pressure from the US government. The final bid price: $5.7 billion (Rs 25,080 crore). Chatterjee declines to get into the specifics of the financing arrangement. "The details are being worked out," is all he says. But foreign media reports suggest that Merrill Lynch has arranged $4.1 billion (Rs 18,040 crore) in debt that will be serviced out of Basell's cash flows, while the partners are bringing in $1.6 billion (Rs 7,040 crore) in equity. Chatterjee adds that Credit Suisse First Boston is also involved but declines to get into details about how much each individual partner is bringing to the table. Here, the story takes an interesting turn.

Media reports suggest that Marvin P. Bush, 49, the younger brother of us President George W. Bush and Managing Partner of Winston Growth Fund, Winston International Growth Fund and Winston Small Cap Growth Fund, is one of his financial backers and helped him pull off the deal. The alleged us pressure to nix the Iranian bid fits in well with this theory, too. Chatterjee, however, emphatically denies this. "I've also read about it," he says, adding: "The confusion arises from the fact that I had floated a fund called Winston Partners LP in 1991. It has nothing to do with Marvin Bush and we have no business connections whatsoever."

Basell's plant in Wesseling, Germany

How long will it take for the deal to close? "We are awaiting regulatory approvals from the European Union (Basell is based in The Netherlands)," he says, adding that he expects them to come through in about three-to-four months.

Basell is the leader of the pack in polymers, there's no question about that. Nearly 40 per cent of all the polypropylene produced in the world uses Basell technology (see Why Basell Is Hot) "Basell has an entrenched system of innovation and has institutionalised the process of taking new discoveries to the market. This is what attracted us to the company," says Chatterjee, explaining why he zeroed in on Basell.

Now that his consortium is in command, does it also plan to take control? "No," he says, "we have the deepest respect for the current management of the company and will retain it." Interestingly, a BASF press release issued soon after the deal was signed quoted Chatterjee's partner Blavatnik as saying: "I'm very pleased that we are the successful bidder for Basell. We are experienced in industrial investments in companies that compete in large, cyclical markets, and we believe Basell is an attractively positioned global business with an excellent future. I am very impressed by Basell's track record, and by the company's highly professional and motivated management and workforce."

THE BASELL DEAL
SIZE: $5.7 billion (Rs 25,080 crore) EQUITY: $1.6 billion (Rs 7,040 crore) DEBT: $4.1 billion (Rs 18,040 crore) DEBT ARRANGED BY: Merrill Lynch and CSFB STRUCTURE: Special Purpose Vehicle SHARE OF INDIVIDUAL PARTNERS: N.A. OTHER SHORTLISTED BIDDER: National Petroleum Company of Iran
	PARTNERS: Purnendu Chatterjee of TCG Group and Leonard Blavatnik of Access Industries

A spokesperson at Access Industries' head office on Fifth Avenue in New York, however, made it clear that Blavatnik plans to exercise his rights as a shareholder in giving direction to Basell. "The acquisition is a natural growth of Access's activities. They have been involved in large industrial companies. And Mr Blavatnik looks to work closely with the management and employees to drive Basell forward. Access, typically, takes active interest in companies in which they (sic) have equity stakes."

Does this indicate a divergence in the way the two partners are viewing this acquisition? Time will tell. But Constantin Gurdgiev, Lecturer, Department of Economics, Trinity College, Dublin, offers a chilling insight into what might happen. "Like most Russian oligarchs, Blavatnik's primary objective is building up the asset value of his holdings through acquisition and market power consolidation. They (the oligarchs) are not able, competent entrepreneurs seeking to expand the economic capacities of the enterprises under their ownership, nor are they technocratic geeks capable of innovation and technological enhancement of their assets. Instead they are power-hungry monopolists of the old corporatist mentality."

Should TCG be worried? Again, time will tell. Chatterjee says he has known his partner for about 15 years now and the two have discussed the possibility of partnering each other in a deal "for a long, long time. It didn't happen earlier; it's happened now".

THE INVISIBLE MAN

Nerve centre: Leonard Blavatnik's office in New York's Fifth Avenue Like most Russian billionaires, Leonard Blavatnik's antecedents are shrouded in mystery. He came to the US in the 1970s as an émigré when relations between the two superpowers thawed and soon acquired Ivy League credentials-a Masters degree from Columbia University and an MBA from Harvard Business School. A regular on the Forbes rich list, the 47-year-old Blavatnik first shot into the limelight when he teamed up with Viktor Vekselberg to set up Renova in 1990 as the Russian arm of Access Industries, Blavatnik's private equity firm. Renova took sizeable stakes in newly privatised Russian companies like oil giant TNK and the Siberian Urals Aluminium Company. In 2003, it sold a part of TNK to British Petroleum for $6.4 billion (Rs 28,800 crore at the exchange rate prevailing then). TNK-BP is Russia's third-largest oil company. The two have a combined net worth of over $10 billion (Rs 44,000 crore). Not everyone is impressed, though. "Blavatnik's primary objective is building up his asset value through acquisition and market power consolidation. His activities do not add value to the Russian economy. All the oligarchs are power hungry monopolists with the old corporatist mentality," says Constantin Gurdgiev, Lecturer, Department of Economics, Trinity College, Dublin, and an authority on Russian oligarchs. The reclusive and media shy Blavatnik (he declined to be photographed for this report), who's a Director on the board of Time Warner Music, has a voracious appetite for conspicuous consumption. He reportedly purchased a $75-million (Rs 330-crore) mansion in Kensington Palace Gardens, London. A similar attempt at buying a swank apartment overlooking New York's Central Park was, however, rebuffed earlier this year. -Anil Padmanabhan in New York

For the moment, though, he's excited about the synergies between Haldia Petrochemicals (HPL) and Basell. "The managements of the two companies will have to take the final call on any collaboration, but prima facie, HPL can use Basell's global network to export its basket of products and improve marketing efficiency. Both companies can benefit by going in for joint procurement and Basell can leverage India's technical expertise and low-cost structure to expand its global dominance," he says, adding that there are no concrete plans in this direction and that he's merely thinking aloud.

Haldia Petrochemical Company: Chatterjee's first blow

Chatterjee, who works an average of 12-15 hours a day, has other interests too (see Chatterjee's Empire). He has huge investments in information technology and biotech companies and is one of India's largest software exporters. Since most of these are small and mid-size companies, the individual figures aren't big enough to get noticed, but make no mistake: he's there near the top, with the best of them. He also has large exposures to the entertainment and real estate sectors. "We financed an ill-fated Bollywood film called Rules: Pyar Ka Superhit Formula, burnt our fingers and decided that this wasn't our scene," he says with a chuckle. Instead, he's now investing in entertainment infrastructure: he has stakes in Rain, a popular Mumbai nightclub, and Galaxy Bowling Alley. "We also develop intelligent infrastructure focussed on the it and biotech sectors," says Chatterjee, who owns large real-estate assets in Salt Lake's technology enclave. He's also developing a 100-acre biotech park in Pune. The investment: he's not saying.

CHATTERJEE'S EMPIRE

LIFE SCIENCES Chem Biotech: This company does chemical and biological analyses for drug discovery. It operates out of Pune and Kolkata. TCGA: It gets its name from the four molecules that make up DNA (A-T-C-G). The Center for Genomic Applications is a joint venture with the Institute for Genomic and Integrated Biology, a CSIR laboratory. It does genome analysis using sequencing micro-array techniques to identify diseases and their causes. TCGA is based in New Delhi. Clinevent: This company does clinical research and conducts trials for pharmaceutical MNCs. It is based in Mumbai. SilicoGen: This firm deals with bio-informatics and the development of systems biology. Its mission statement is to create a new paradigm and business model in order to lower the cost of drug development. It is based in Kolkata. INFORMATION TECHNOLOGY TCG Ivega: Software development company based in Kolkata, Mumbai and Bangalore. Skytech Solutions: This is a joint venture with United Airlines for developing software for airlines and airports. It is doing a lot of work for various Chinese airports and is based in Kolkata. Fitek: This company develops software for wealth management and hedge fund accounting, and operates out of Kolkata. Labvantage Solutions: Yet another TCG Group company that develops software for laboratory information management. It is based in Kolkata and New Jersey. BUSINESS PROCESS OUTSOURCING Outsourced Partners International: OPI does accounting work for multinational corporations and operates out of Bangalore and California. REAL ESTATE TCG Urban Infrastructure Holdings: This company builds modern, intelligent infrastructure primarily for IT, IT-enabled and biotech companies. It is currently building International Biotech Park on 100 acres of land in Pune. The TCG Group also has huge real-estate holdings in the software sector of Kolkata's Salt Lake surburb. The Rain nightclub in Mumbai ENTERTAINMENT Galaxy Bowling Co.: Owns a part of Galaxy Bowling Alley in Mumbai and also owns a part of Rain, a nightclub in Mumbai. INDUSTRY Haldia Petrochemical Company: Co-promoter of this pet project of the West Bengal government. Expected to post a profit this year after years of problems and losses. Based in Kolkata.

THE BOY NEXT DOOR

He's the boy next door who's made good. Before his trail blazing takeover of Basell Polyolefins, Purnendu Chatterjee, 55, was known in India as the George Soros associate who helped promote Haldia Petrochemicals. Little else was known about him. "That's the way I like it," he says. Getting him to talk about himself is like extracting water from stone, but he finally opens up after a lot of coaxing. Born into a middle-class Bengali family, Chatterjee graduated from the Indian Institute of Technology, Kharagpur, in 1971 with a degree in Mechanical Engineering after passing out from the Ramakrishna Mission School in Narendrapur. From IIT, it was a hop, skip and jump to the University of California, Berkeley, where he completed a PhD in operations research in 1974, joined Stanford Research Institute and moved on to McKinsey & Co. after two years. His first big break came when he was made a partner at the world famous consultancy in 1984, at the age of 34. While at McKinsey, he married the daughter of industrialist Viren J. Shah (a Gujarati; usually strict vegetarians), who would go on to become a BJP MP and later, the Governor of West Bengal. "She's non-vegetarian; so there are no disputes at the dining table," he says jokingly, adding that like most Bengalis, he's fond of fish. But he soon grew tired of advising CEOs on how to run their companies; he longed to become a mover and shaker himself. "I quit my job and took over a small technology company called John Beall & Co.," says the suave and soft-spoken financier, describing his first independent foray into the world of business. His mentor, George Soros, whom he had met while at McKinsey, chipped in with $340,000 to finance the deal. This was the first of a series of leveraged and, sometimes, hostile takeovers that would make Chatterjee both a respected and feared name in US corporate circles. He had his share of controversies, too. In 1986, he launched a hostile takeover for T-bar, a mid-sized computer company, which took him to court alleging that he had violated US stock-market watchdog Securities and Exchange Commission (SEC) guidelines. The court ordered Chatterjee to pay $114,500. Four years later, he faced allegations of insider trading in Foxboro & Co., a large manufacturer of industrial instruments in which he and Soros held a 4.8 per cent stake and on whose board he sat as a director. This ended in a consent decree with SEC whereby he paid $643,855 without admitting any wrongdoing. Ask him about these and he says: "It was a long time ago and no charge was established." In India, Chatterjee, who drives a Mercedes and wears suits custom tailored in New York, has built up a formidable-albeit low profile-portfolio of technology, real estate, entertainment and industrial companies with a combined turnover of about Rs 8,500 crore (see Chatterjee's Empire). Since almost all his companies are privately held, exact numbers are hard to come by, but insiders estimate that his IT companies alone export software worth Rs 1,500-2,000 crore annually, making him one of India's larger software czars. Chatterjee, who became a US citizen 15 years ago, now divides his time between New York, where he maintains a small apartment, and Mumbai, where his wife and family stay. How much is he worth? Again, as with most fund managers, it is difficult to get a fix on his personal wealth. But people who know him since the days he first entered India as the geeky-looking white knight who rescued Haldia Petrochemicals from the brink of oblivion estimate that he is worth about $1 billion (Rs 4,400 crore). Whew! The boy next door has come a long way.

The Basell takeover has brought Chatterjee from the peripheries of India's industrial scene to its centrestage, but rivals and friends alike find it difficult to size up the man. One of India's leading industrialists calls him "very, very clever and a great dealmaker who can work with all kinds of players-even if they themselves are rivals". Even a cursory glance at his personal and professional dossiers will show that to be spot on. He's the son-in-law of industrialist-turned BJP MP-turned West Bengal Governor Viren J. Shah; yet, he's the poster boy of communist West Bengal: he enjoys warm relations with Marxist icon Jyoti Basu, Somnath Chatterjee and Buddhadeb Bhattacharjee. He's been investigated for insider trading by the sec in the us, but he partners Ratan Tata, who's known for his squeaky clean image, in HPL. He is also buddies with Rajat Gupta, the first and only Indian Managing Director of McKinsey, and Kanwal Rekhi, bulge bracket venture capitalist and one of the founders of The Indus Entrepreneurs.

RIL Chairman Mukesh Ambani: Matrix challenged

Managing contradictions and moving on seems to be the leitmotif of his career. But where does George Soros, his early mentor, fit into his scheme of things now? "We did a lot of projects together," he says, "but now I operate independently and have no further business connections with him."

The associate has clearly come into his own. But despite his dizzying success, he remains a middle-class boy at heart. "I don't really have much time to spare, but whenever I do, I like to relax by listening to Bollywood songs and Rabindrasangeet," he says.

Any more big deals in the offing? He smiles enigmatically. "Let's see," he signs off, tantalisingly.

-additional reporting by Anil Padmanabhan in New York

PURNENDU SPEAKS "Sustainable competitive advantage is the key"

What's your investment philosophy? What do you look for while deciding on an investment proposal? (Laughs) There are various issues that I look at. But the most important are: does the company have a sustainable competitive advantage? Does its management have the vision and the capacity to stay the course? And does the company have the potential to become a big business in the foreseeable future? I move in only if the answers to all three questions are in the affirmative. Thereafter, I provide only operational and management guidance. The managment is fully empowered to execute the agreed business plan. Why did you invest in Basell? Will you and Leonard Blavatnik micro-manage the company? Basell is the world leader in polymer technology, owns more than 8,500 patents and has manufacturing facilities in 21 countries. So it is a prized company to control. It also has a strong management in place, which we will retain. Our job will be to provide inputs when the need arises and to work with the management to take the company's leadership position forward. Where does Haldia Petrochemical fit into the picture? That is for the two managements to sit together and figure out. It's early days yet, so I can't give you any details. But yes, it is our intention that we fully exploit the synergies that exist between the two companies and extract maximum value for all the stakeholders in the two ventures.