Business Maharajas

Title: Business Maharajas

Author: Gita Piramal

Publisher: Penguin, 1997 (First published 1996)

ISBN: 9780140264425

Pages: 474

Businesses are sometimes likened to empires. Just like a real empire, every business concern encounters aggression from all corners, not necessarily armed ones. This mandates an intelligent, powerful and far seeing emperor at the centre. Such maharajas fend off predatory moves by competitors, devices plans for the routine administration and put in place programs by which more revenue could be earned. In a large business empire, the leader sits at the centre, sensitive to the slightest tremor on the web. This book showcases seven prominent business houses led by Dhirubhai Ambani, Rahul Bajaj, Aditya Birla, Rama Prasad Goenka, Brij Mohan Khaitan, Bharat and Vijay Shahs and Ratan Tata. Their combined turnover runs into billions of dollars and they employ millions. India looks at its entrepreneurs with suspicion and a touch of derision. Books like this bring out the human being in them – his fears, hopes and happiness. Reading about the buildup of a business empire, we wonder at how commonplace each step is, requiring nothing more than commonsense and a pinch of logical thinking. It is such ordinary steps that build magnificent edifices people wonder at. The history of a successful business entity thus instills confidence among people that such feats are not beyond their reach. Gita Piramal is a freelance journalist with a doctorate in business history. She has authored many books and is writing and commenting on the corporate sector for many decades. This book also brings to light some of the horrible stories of how a corrupt, socialist government meddled in industry and made a mess of it all.

The most tragic feature of the License–Quota–Permit raj of the socialist era of post-independence India was the blatant intervention of the government in business. The bureaucrats who actually dabbled in this often had only a fleeting idea of what a business is, and was guided by left-leaning politicians, who corrupted the system. They even controlled capacity expansion of private industrial establishments. The production target was fixed by the government and you were not allowed to exceed it. Whenever it announced some liberal measures, it was solely intended to be of profit to a particular business house which greased the palms of Indira Gandhi and her sycophants. In 1971, she allowed the import of polyester filament yarn, against export of rayon fabrics to assist Ambani. After he built a filament yarn plant in India, it was withdrawn in 1979. Again, the country curtailed production of synthetic fabrics, which led to a spurt in smuggling that in turn helped the politicians in the form of kickbacks from smugglers. Sometimes, the decisions were so blatantly stupid that we’d be amazed at the thinly veiled pandering to some arcane socialist principle. In 1984, it granted a PTA (purified terephthalic acid) plant to Reliance, but will not give permission to its competitors, who received it only after the liberalization agenda was put in place in 1991. By then, Reliance could make a head start. Government even interfered in the management of private companies. It denied the extension of partnership of Bajaj with Vespa in 1971, citing that the company had become a monopoly. However, the real reason was that Kamalnayan Bajaj sided with the opponents of Indira when Congress split in 1969. This was at a time when people had to wait for years after booking a Bajaj scooter to take delivery! Flawed ideological affiliations of short-sighted politicians wreaked havoc in the industry when such people found power in their hands. George Fernandes, a socialist trade-union leader turned minister, drove out Coca Cola and IBM from India. He also compared the business community to rats. Nehru was also not free from the allegation of shortsightedness. He denied approval to Birla to set up an integrated steel plant in Bihar, on the flimsy argument that such plants were reserved for the public sector. This greatly upset Birla, who had already found a U.S. partner for the plant. In the end, Nehru allowed to set up Hindalco, as some kind of consolation.

The one thing we note repeatedly in the book is that there is no clear cut path to success. These winners have each taken an unknown trail through the wilderness to reach glory. There are countless others who fell by the wayside and we will never come across their stories. The diversity of the successful entrepreneurs in their modus operandi is humongous. Ambani, whose name was said to be an acronym for ambition and money, was a proponent of backward integration. He began with textiles, which is an end product for consumers, and worked his way backward through the intermediate chain like polyester, petrochemicals, refinery and finally, oil exploration. Sometimes, fights between industrialists broke out, who go all out in devising means for humbling the opponent. One such illustrative case is described by the author, which must be mentioned. The newspaper Indian Express carried a series of stinging articles against Ambani and Reliance in 1986-87, causing much harm to its business interests. This was later turned out to be designed to favour Nusli Wadia of Bombay Dyeing in their tussle against Reliance. Wadia’s closeness to Ramnath Goenka, who controlled Indian Express, was legendary. People like Vijay Shah were very flamboyant, while Ram Prasad Goenka was reclusive to the point of not even divulging the names of books he was reading so as not to present an opportunity for others to gauge his personality! Then again, some are attracted to high risk-taking, while others are averse to it. Birla never made a product that required large-scale promotion and stayed away from consumer products which were risky. Businessmen like Tatas were thrifty, while others like Vijay and Bharat Shahs were extravagant. When the opulence at Shah’s daughter’s wedding exceeded all limits, public protest marred the proceedings. The boasting of the Shahs reproduced in the book – if true – is a challenge to the rule of law. He claims to have made the Thai government fall in line to grant him tax exemption by threatening to walk out. He organized traders’ protest against taxmen who raided his offices to search for income tax evasions. His construction companies were notorious for not honouring their commitment to handover residential flats at the proper time.

Gita Piramal has done a wonderful job in compiling a book of this kind that is also eminently readable. Credit must be given to her in formulating criteria to select the businessmen who were to be covered in the text. The author hit upon three parameters for objective analysis – look into the past and the future, territorial dominance and talent from established business families. The third criterion ruled out professional managers and self-made entrepreneurs like IT stalwarts. Vijay Mallya is curiously omitted, which is all the more prescient considering the financial scams he fell into. The book was published in 1996, and the information is hence slightly dated. It is high time a revised version hit the stands. The book includes the family trees of all seven clans, which is a nice place to scout for some very good baby names for those so inclined! An impressive bibliography and a basic index add value to the work. A set of photographs would’ve added more interest.

The book is highly recommended.

Rating: 3 Star