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Wednesday, Jun 28, 2006

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The story of billions

Tuesday's newspaper had two stories which overshadowed everything else including the World Cup quarterfinals. The first was the "marriage" between Mittal Steel and the $31-billion Arcelor which, if it goes through (at the June 30 shareholders' meeting), will form a steel entity comprising two of the world's largest steel companies. The second was the decision of Mr Warren Buffett, the world's second richest man, to donate 85 per cent of his $44-billion fortune (at $1.5 billion a year)) to the Bill and Melinda Gates Foundation, which reportedly will allow the foundation to more than double its annual grant payments of $1.36 billion (in 2005) "at a minimum".

Surely, the figures cannot be easily comprehended by the average Indian or, for that matter, by any common citizen of any country because of the scale of the figures involved. And yet these are news items which cannot be ignored because of two main reasons. First, one would appear to be a confirmed ignoramus if one were to be unaware of these developments at one's place of work or even at the breakfast table at home. Second, the events are intrinsically important in that they help to throw light on crucial aspects of human behaviour which, at first sight, may appear to be totally at variance with each other.

To take Mr Lakshmi Mittal (56) first, he has graphically described the entire process of the merger between his company and Arcelor of Luxembourg as a courtship leading up to the nuptials. As he said: "We have been trying to persuade the bride for the last five months that we love her and she should accept our marriage proposal."

The company has now agreed to the proposal; it remains to be seen whether the shareholders will do so in the next couple of days — and whether the rival suitor (Severstal, controlled by the Russian Alexei Mordashov) will accept the switch of affections gracefully. In other words, the Mittal-Arcelor deal has shown clearly the extent to which the human acquisitive spirit can go — even if the solid economic and financial basis of such action may not pass the litmus test of many a corporate pundit.

Mr Buffett (75) — of corporate raider fame or infame in the 1960s and 1970s — has shown the world what a surfeit of acquisition can do to the human spirit. Among other things, he is reported to have told Fortune magazine: "We agreed with Andrew Carnegie who said that huge fortunes that flow in large part from society should in large part be returned to society."

At one point, Mr Buffett is said to have christened his Gulfstream IV-SP jet `The Indefensible', which is not too difficult to understand in view of the fact that the man in question has continued to live in Omaha "in the same gray stucco house" he purchased in the 1960s for $31,500, always having burgers or steaks for dinner which he washes down with Coca-Cola.

Compare this with Mr Mittal's mansion in Kensington or his new villa in St Moritz, hallmarks of a man (the fifth richest in the world) on the go, striving to attain the pinnacle of wealth and corporate control till he too is ready to pass on — while planet Earth continues its revolutions around the sun for a few more millennia.

Ranabir Ray Choudhury

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