Page 90 - EW June 2023

Postscript

Blanket silence London in the nick of time before rigid foreign exchange
controls were imposed.
CCORDING TO TOP BRASS OF THE STATE In the UK where business is governed by rule of law,
Bank of India, May 15 was a red letter day for the under SP’s leadership the Hindujas purchased British
Abank and the country. Full front-page ads splashed Leyland’s truck manufacturing business in India (now
in the Times of India and several other dailies informed Ashok Leyland) and the French oil company Chevron,
the long-suffering public of the silver jubilee (25th an- and against all odds, established a bank in Switzerland
niversary) of SBI credit cards. For your editor, it was a (Hinduja Bank), made sound investments in real estate,
day of heart-burn, if not lamentation, because it raised emerging to top the Sunday Times league table of UK’s
the question why retail credit made its debut in India half rich with a net worth estimated at $31.7 billion in 2022.
a century after credit cards had become commonplace in Real estate assets include Carlton House Terrace, the
the US and other Western countries. Xanadu-style Hinduja family residence, down the Mall
Today there is a blanket of silence over precisely who from Buckingham Palace and the under-construction
were the economists who advised the (Congress) govern- Raffles Hotel which is slated to emerge as Europe’s most
ments of the time to proscribe retail credit. Several his- luxurious.
tories of independent India have been written, but their Unfortunately in recent years, cracks have appeared
acclaimed authors are silent on this issue. in the brothers ‘everything belongs to all and nothing to
Your editor’s explanation of this mass deprivation one’ wealth sharing philosophy with the next generation
is that under the Soviet inspired socialist development falling out. But that does not detract from the heroic
model, citizens’ savings were siphoned away for invest- adventures, leadership and sense of timing of SP, perhaps
ment in capital-intensive public sector enterprises (PSEs) the last of the old-world business tycoons of the 20th
which were expected to generate vast profits that would century.
build millions of affordable homes, public schools and
consumer durables. Yet these grand schemes went bust Arbitrary ceiling
when business-illiterate bureaucrats, appointed to run
PSEs, could never generate the “surpluses” (profit was a
bad word) envisaged by 13 grand Five-Year Plans. As a HE ADANI CASE GETS CURIOUS AND CURIOUS-
result, the modest material aspirations of an entire gen- ER. Now that the Supreme Court has absolved
eration of Midnight’s Children were reduced to dust. Only TSEBI (Securities & Exchange Board of India) of any
in 1991 since the Industrial Development Regulation Act, lapses in investigating whether there was any truth in the
1951, which strangled private enterprise, was scrapped by Hindenburg Report of January which accused infrastruc-
Prime Minister Narasimha Rao, has retail credit become ture — airports, marine ports, cement, grain silos and ed-
available to citizens. ible oils, media — developer Gautam Adani of fraud stock
Yet the learned economists and Central planners who price manipulation, money laundering etc, which sent the
denied ordinary retail credit to a whole generation have value of all Adani group equity shares crashing, wiping
never been called to account. Indeed, most of them have out almost Rs.10 lakh crore by February 5, Adani shares
gone on to greater glory. have started climbing again. Moreover, R.N. Bhaskar,
author of Gautam Adani: The Man who Changed India
(2022), says that Adani owns “hundreds” of cargo ships,
Last tycoon each registered under separate companies and foreign
flags, and can be bought and sold overnight and several
companies in Australia, Dubai, Israel and Egypt. They are
HE DEATH IN LONDON ON MAY 17 OF Srichand
Parmanand Hinduja at age 87 received grudging legally entitled to purchase Adani company shares.
Tparagraphs and cursory coverage in the Indian Therefore, the only subsisting charge against Adani
print and television media, given to saturation coverage is that through these and other opaque firms, he has
when politicians and movie stars with relatively modest breached Rule 19 of SEBI regulations that disallows pro-
achievements go the way of all flesh. moters from holding more than 75 percent of the equity
The seeds of the global Hinduja family were laid by in any listed company.
Parmanand Hinduja who built a modestly successful car- One wonders why it’s necessary to impose a ceiling on
pets trading business in Karachi, Sindh in pre-partition promoters’ shareholding. True it will create a shortage
India. However, this business was shut down when after of tradable shares in the marketplace, but it also reflects
Partition the family fled to India in 1947. In Mumbai, a promoter’s confidence in the success of his enterprise.
Parmanand started over as a commodities trader (onions, In this particular case even if as alleged, Adani holds a
potatoes, iron ore) and built up a sizeable trade with Iran. greater percentage of arbitrarily imposed ceiling and
But with growth and development of business in India raises funding against inevitably higher valued stock to
severely curtailed by pervasive licence-permit-control build force multiplier infrastructure, the strategy works in
raj of the Indira years, the family moved to Iran and the public interest.
during the Reza Shah Pehlavi years, built a formidable As to the question why the Adani wealth meltdown has
fortune trading in commodities. However with the return attracted so much comment in this education magazine,
of Ayatollah Khomeini from exile and the beginning of while Adani has suffered a massive loss, your editor — a
clergy dominance in Iran, SP read the writing on the wall bona fide investor in the India growth story — has also
and liquidated, moving the family fortune to Geneva and lost a bundle.

90 EDUCATIONWORLD JUNE 2023