Secret Diary of Subhash Chandra, chairman, Essel Group & ZEE | Biography Part- 2 | Outlook Business
Home  /  Specials  /  Secret Diary of an Entrepreneur 2018  / "It's only too common for a small fish to get crushed when titans clash" | MAR 27 , 2018

Photograph by Soumik Kar

Secret Diary of an Entrepreneur 2018

"It's only too common for a small fish to get crushed when titans clash"
 Secret Diary Of Subhash Chandra — Part  2

N Mahalakshmi

Subhash Chandra, chairman, Essel Group & ZEE

I came in contact with Sanjay Gandhi through an acquaintance, Tripathi. I would carry out small errands such as buying tickets for the Gandhi family, whereby I would meet Sanjay just enough number of times for him to remember my name and face. Those days it was not easy to meet the Gandhi family as they were not in power. In the meantime, my business associate, Chanana, told me about the USSR barter trade where the country bought commodities from India, and it was through political patronage. We designed a deal — I would get the export order, he would put in the working capital, and we would divide the money 50:50. I decided to enlist the help of a relative, who had a fairly tarnished image — Rajinder Mittal — to meet Swami Dhirendra Brahmachari. He was known to wield great influence then and I had a straight conversation with him. After several long dicussions, he arranged a meeting with Rajiv Gandhi.

Mrs Gandhi & SwamijiI went to Bungalow 2, Motilal Nehru Marg and met Rajiv’s man Friday, Vijay Dhar. After a 10-minute chat, I was in business. Swamiji and Tripathi were to be given a cut. After we bagged the contract, the Soviet official asked me to meet Tulsi Tanna, the monopoly exporter in the trade. Under the guise of helping me, he made an offer that included me splitting the profit by opting out of the trade. Although it looked like easy money, I declined. In a hilarious turn of events, after the first consignment reached Moscow, Tanna accused us of selling inferior quality rice instead of basmati. I flew down to the capital city and asked the Soviet officials for samples of Tanna’s stock that was more white but was original parimal rice, inferior than basmati. I accepted my mistake and agreed to change future stock. I immediately called Delhi and asked them to sell off the existing produce and send cheaper parimal rice instead. Here was a case of an ignorant customer insisting on a low-grade product, leaving us with more money on the table!

As the business grew, so did Swamiji’s greed. For a 1983 contract, even though he took an advance of 2 crore as his share of the profit, he urged the Russians to give the business to some other firm, where he had become part-owner. When I learnt of this, I asked my friend, Vijay, to request Swamiji to return the advance. The matter reached Rajiv Gandhi, and then Indira Gandhi. I can never forget the day I was called to the PM’s house. I was there sharp at 7 pm and must have waited till midnight when I was finally called in. There were three people in the room, Mrs Gandhi, Rajiv and Swamiji. 

Subhash Chandra old picIndiraji said, “Oh! I thought you were an elderly person.” I was only 32 then. I couldn’t get myself to look at Swamiji, I could see him fuming from the corner of my eye. She continued, “How much money did you pay Swamiji?” I told her the amount. She said, “Alright, do you want to continue working here?” I said, “Yes, I would like to work here, but I do not want to pick a fight with anyone.” She said, “Fine.” I stepped out and waited for another two hours, when Rajivji came out and assured me, “Not to worry, sleep peacefully. Everything would be fine.” That was such a moment of relief! I went home and directly hit the bottle. From that point onwards began the downfall of Swamiji. I was afraid because it’s only too common for small fish like us to get crushed when titans clash. I was not aware of the risk involved till I was part of that circle and overheard stories about what happened to some others 10 years ago. I was intimidated by the tales of betrayal and revenge. But in 1984, when they decided to give the contract to someone else, I was happy to quietly move on. I told Rajiv Gandhi I wanted to leave Delhi and get away from all this, and probably set up an industrial unit. The only day I felt close to getting crushed was that evening. I must have aged 10 years in 10 hours that evening.

***

finally, into an industrial set up!

I first noticed plastic laminated tubes during my visit to Europe in 1981. And I was fascinated by what I saw. I partnered with a Swiss company, KMK Machine and the American Can Company for the technology. A study I commissioned to Tata Economic Consultancy Services said that the business would not be viable as the cost of equipment and technology was way too high to achieve break-even. The technology was ahead of its time, and the adoption in India was yet to be proven. The report did not help my case and IDBI, ICICI and IFCI rejected our loan application. But I went ahead regardless. There were issues even before we started. I had secured an industrial licence to set up a factory in Haryana without realising that most of our customers were in the western region. Supplying from the north would have made the costs prohibitive, but the Haryana government didn’t allow us to move the project. That’s where Vijay Dhar came to the rescue.

Even as we were building the factory, our effort to get toothpaste manufacturers to commit weren’t yielding results. They were not willing to shift from aluminium tubes. I was desperate so I made the deal sweeter for them. I reduced the price, offered to bear some part of the capital cost of installing filling lines at their factories, and most importantly created a competitor for myself as clients were uncomfortable at the thought of a single supplier. I convinced Anil Chanana to put up a plant with technology support from us.

the amusing fate of no-devlopment landFinally, Hindustan Lever agreed to book our entire capacity. I invited Shunu Sen to inaugurate our plant in 1983 but it didn’t give us a single order for two years citing some or the other reason. Lever cleverly booked our capacity preventing us from supplying to others. I was frustrated. I was losing patience and money. I decided to break the agreement, and negotiated with Parle to supply tubes for its new toothpaste, Prudent. The new launch created ripples. The incumbents — Colgate, Godfrey Phillips and Ciba-Geigy — were a worried lot and moved swiftly to plastic tubes, and by the time Lever switched, it was 1986 and we were running at full capacity.

This is the second of a two part series. You can read part one here and part three here.

Here's your chance to read the latest issue of Outlook Business for free! Download the Outlook ​Magazines app now. Available on Play Store and App Store
On Stands Now