Peak tycoon

REACHING the top is difficult in Nepal, as any mountaineer will tell you. But scaling the heights of business is scarcely easier: the landlocked former kingdom, which in recent decades has swung between kleptocratic monarchy and chaotic democracy, can be as tough for entrepreneurs as the upper Himalayas are to trekkers. Only the hardiest—and those perhaps willing to take a few cunning short cuts along the way—will succeed. Binod Chaudhary, whose interests range from noodles to cement by way of hotels and banking, has trodden the trail and come out as Nepal’s sole billionaire, according to Forbes.

Most tycoons seek to downplay the role of political connections in their ascent. Not Mr Chaudhary. In an autobiography recently updated for an English translation, he offers candid advice: “In Nepal, you do not need great ideas to become a great person. All you need to do is to hobnob with the right people.” His account of which palms were greased or whose son-in-law co-opted leaves little to the imagination.

The Chaudhary Group (CG) he now runs traces its roots back to the 1880s, when Binod’s grandfather migrated from India to sell textiles. Forays into construction and Nepal’s first department store provided a base from which the current patriarch, now 61 years old, could build. An astute early investment was Copper Floor, Kathmandu’s most elegant nightclub in the 1970s, which gave Mr Chaudhary access to the connections he came to depend on, starting with the royal family.

Financing the royalists’ campaign in a pro-democracy referendum in 1980 was rewarded with lucrative licences to import booze and sell paper, for example. Two years later, handing over half a steelmaking venture to the then-king’s brother “was the main reason for my success”, he writes, exposing himself better than many investigative journalists might have managed.

The profits generated by such quid pro quo deals helped finance an industrial mini-empire in a country in which few things are made domestically. A knack for efficient execution has undoubtedly been part of the mix, as even critics acknowledge. The group’s Wai Wai instant noodles, originally a means to soak up excess flour at a biscuit factory, have proved a hit in Nepal and beyond: over two billion packets are now sold every year.

CG claims 10,000 employees, many of them based at an industrial park in the south of the country turning out cigarettes, assembling televisions and lots more besides. Nabil Bank, a lender taken over by an offshore CG proxy in a manner that peeved Nepal’s central bank (“My detractors’ allegation that I circumvented the law is not completely untrue,” concedes Mr Chaudhary), is one of the few listed entities of an otherwise privately-held group.

But Nepal is smaller than Mr Chaudhary’s ambitions. Despite a ban on Nepalis investing abroad, CG has diversified internationally, notably since its royal chums were given the boot in 1990. CG now has eight noodle plants in India, and more are in the works in Serbia, Kenya, Saudi Arabia and Bangladesh. Hotels dotted around Asia, power projects and cement plants in East Africa and property developments in the Gulf add up to a group with a self-assessed value of $2 billion.

Even outside Nepal, much still depends on relationships. CG seeks opportunities where others fear to tread, often for good reason. Mr Chaudhary says his group thrives in places which operate today in ways similar to the Nepal of the 1970s. Iraq and Afghanistan are seen as ripe for investment. Conversely, CG is a “misfit” in fuddy-duddy America, too regulated and structured for Mr Chaudhary’s taste. The group’s single investment there, a share of a Hilton hotel near JFK airport in New York, has clearly disappointed him.

Prodded on whether all this makes for sound business in an age obsessed with corporate governance, Mr Chaudhary is unapologetic: when in Rome, do as the Romans do. Tough environments deliver good returns. He wishes things might be different, he says, but they are not. While businessmen like him have good intentions, when there is no other way of getting things done, what other options exist?

Though two of his sons are abroad, in India and Singapore, the eldest and heir-apparent looks after the business in Nepal from Kathmandu. Power, telecoms and infrastructure are priorities for Mr Chaudhary’s first-born, not coincidentally sectors where relationships with government matter. CG still has connections that count: during the interview, Mr Chaudhary twice offered to introduce your correspondent to the prime minister of Nepal, with whom he was meeting next.

Having served in parliament before and advised governments of all stripes, Mr Chaudhary today barely hides his own political ambitions. He admires tycoons who thrived in office, such as Thaksin Shinawatra, the former Thai prime minister, and praises the showmanship of Donald Trump. In the right circumstances, he thinks he could help Nepal’s economy. But serving as prime minister wouldn’t promote CG’s interests, he says. Business and politics, after all, are best left separate.