James Palumbo: dance-club millionaire turned satirical novelist

Old Etonian James Palumbo made millions from turning a derelict South London bus garage into a multi-million pound clubbing empire. Now he's turned his hand to writing.

In the glory days of the Ministry of Sound, the club's mercurial founder was usually to be found in a glass cube office peering down at his youthful workforce. James Palumbo was always a remote figure, says The Independent on Sunday. It would be hard to find a more unlikely dance club boss. He combined an aesthete's love of fine wine and classical music with a reputation for ruthless business dealings, inspiring either devotion or loathing. "He'd make a good Bond villain," noted an associate at the time. "The chilly, clever loner who wants to take over the world."

On most measures, Palumbo has succeeded. Having transformed a derelict former bus garage in Elephant and Castle into "an urban dance cathedral", he has built the Ministry (renamed MSHK last year) into what he claims is the world's largest independent record firm, turning over £80m last year. But the business (now 18 years old) has had its ups and downs. Most notably a planned £150m stockmarket flotation a few years back was hastily scrapped. But it has since rebounded, despite rivals claiming dance music and the Ministry were finished. Palumbo, who sold a 16% stake to 3i for £25m in 2001, now takes a back-seat from the daily running of the company. His personal fortune is around £130m.

At 46, he professes not to care much. "Deep down I probably despise money," he tells The Sunday Times. Indeed, his first novel, published this week, is a biting satire on the Age of Eurotrash. Yet money has always played a central role in his life, shaping the six-year legal battle with his father, property developer Lord (Peter) Palumbo, over the running of a family trust fund. He effectively ousted his father, cementing "an extraordinary estrangement... that has lasted 25 years", says The Times.

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Despite an upbringing "of textbook privilege", Palumbo has always had a "visceral" fear of poverty. He grew up at Buckhurst Park, Windsor (now the home of the King of Jordan), and was educated at Eton and Oxford. "But when I left home at 18, I felt that it was me against the world." At school, he became a hated figure as house captain after getting some cannabis smokers expelled. He was rumoured to keep "a little black book of secrets". Some claim he thrived on the hostility. He was certainly driven enough to rake in his first big wedge of cash during his gap year when he headed to Los Angeles with a friend and set up the Etonian Butler Service.

After Oxford, he emerged as a high-flyer at Merrill Lynch and Morgan Stanley. When a friend approached him in 1991, with the idea of bringing the US dance-club craze to Britain, he put up £250,000. A year later, he took over the reins himself. He knew little about the music, preferring Benjamin Britten to boom-box. But the edge he brought was "discipline".

Palumbo remains a contrary character, says The Times. He has never married, although he has an 18-year-old son, and he lives in the same elegant Kensington flat he bought 25 years ago with his old friend Pim (a Thai Princess), surrounded by pre-revolutionary French artefacts. A friend of Peter Mandelson, he is mulling over starting a career in politics. Some consider that a waste of his ability. "He could be the new Richard Branson if he wanted," the music impresario, Simon Napier-Bell, once remarked. "The difference is he's a much better businessman than Branson."

His grotesque but gripping lampoon of celebrity culture

For a man who got rich by capturing the zeitgeist, Palumbo is curiously old-fashioned, says The Times. "I never borrow money. I think the opposite of someone who'd drive down the Croisette in Cannes in a convertible Ferrari with loud music and a blonde." Palumbo captures some of that mood in his first book Tomas (an acronym for There is Only Money And Sex) a surrealist take on the future, "which lampoons the vulgarity of a craven celebrity culture fed by reality TV, and businessmen genuflecting before Russian oligarchs". It is Rabelais meets Tom Wolfe. "I have always been fascinated by how people behave round money... the excesses, the obscenity of it all," he says. The book has already won plaudits from the likes of Stephen Fry and Niall Ferguson, who described it as "grotesque", but also "gripping".

Palumbo's main business inspiration was his grandfather, Rudolf, the son of an immigrant Italian who built a property empire in the City. "I probably sensed... that the business side of the family might not endure following my grandfather's success." Yet given his father Lord Palumbo's record in property (he made a fortune developing 1, Poultry, a retail building in London), this seems odd. Perhaps his father lacks a sufficiently puritanical streak. "To me extravagance is exceeding the limits of reason or necessity." You've got to have money. "But once you've got it, so what?"