This four-tier security system could be breached only by the fishing trawlers, which, legally, were allowed to move freely. Fishing is a business of chance and opportunity. Sometimes they net a huge amount of fish in their nylon nets, while at other times the catch is disappointing.
It is for this reason that fishermen often sail into deeper reaches of the sea and farther limits of international waters, crossing into the territories of neighbouring countries like Pakistan or Sri Lanka. Often the navy of these countries chases the Indian fishermen and also has skirmishes with them. Occasionally, many fishermen are also arrested on the suspicion of spying by Pakistan.
The fishermen’s community is highly superstitious about netting a big catch and heavily ascribe their success to luck and good fortune. So, in this scenario, if someone approaches them and promises them a stable income regardless of the amount of catch in the open sea, it is difficult to resist such a lucrative offer.
Khalid had managed to persuade a few big fishermen with trawlers to venture out into the open seas and cross the territorial waters. Once they were beyond the watch of the four-tier security patrol of the Indian agencies, Khalid’s men would get their speedboats close to the fishing trawlers. Khalid managed to load the gold consignment on to the speedboats from Dubai and then transfer the contraband into fishing boats some 30–40 km into the high seas. The whole transfer of goods was done within a few minutes and without alerting the eagle eyes of any kind of vigilance agency.
These fishing boats can surreptitiously hide the gold-laden jackets below their cache of fish and bring them to Indian shores safely. These boats can then unload the gold at Versova, Vashi, Juhu, Gorai and other beaches in Bombay. It was a pragmatic and simple arrangement that had defied all security and opposition and ensured that the gold always reached the city. Sometimes, Khalid also used fishermen from southern India and unloaded consignments in Madras (now known as Chennai), Mangalore and through jetties at Kerala.
This was an unbeatable masterstroke, which would only maximize the gang’s earnings and give them the upper hand in gold smuggling. Soon, this method of beating the law became all the rage in the smuggling world. The Dawood gang started to make a killing in the seas.
In the meanwhile, Dawood was cleared of all COFEPOSA charges by the Gujarat court in 1983 and returned to Bombay like a triumphant don. His gang had definitely proved its supremacy in smuggling after liquidating their detractors in the Pathan clan.
Dawood may have been paying less attention to the logistics and intricacies of smuggling, but he was steadily growing in influence. The connections and nexus Dawood made with politicians, the police and customs officials were invaluable to him and were being worked upon for future use and troubleshooting.
Khalid briefed Dawood about the business and how he had managed to increase the profit margin through his deft handling of vessels at sea. Dawood heard the whole strategy and was mighty impressed with his game plan. Then Khalid proposed that Dawood make a visit to Galadari in Dubai. Dawood could not believe that Khalid was so transparent that he did not have any problem in introducing Dawood to his partner who was one of the most influential and powerful businessmen in Dubai.
Within a few days, Dawood and Galadari were seated opposite each other. Dawood was overawed by the opulence of Galadari’s multibillion-dollar empire; he had never seen such staggering fortune and affluence. Dawood had seen Haji Mastan and Bashu Dada closely and often spoke about their wealth with exclamatory expressions, but on that day he realized that they were not close to being even the errand boys for this filthy rich Arab.
Both Galadari and Dawood met each other with extreme warmth and cordiality as Khalid was the common link between them. They had both heard legendary things about each other, which spiked their admiration further. However, what the two of them did not realize was that there was mutual dislike and disapproval right in the first meeting and the vibes did not match. Incidentally, Khalid was totally clueless about this disconnect between two of his closest friends.
Once in Dubai, Dawood met with Pakistani syndicates as well and hobnobbed with them at various levels. Dawood had a certain earthiness about him and he realized that his rapport and comfort level were much smoother with Pakistani smugglers, including the Bhatti brothers, Chhota Zikar, Bada Zikar and others. The Pakistani smugglers were keen on a willing and hungry Indian partner, and Dawood fit the bill. Soon, Dawood and the Pakistani syndicate began discussing plans to smuggle gold and other contraband from Dubai.
Khalid and Dawood returned from Dubai and began pushing their business to new levels of intensity and volume. They both were heads of the Bombay syndicate, and most of the rules of the group were drafted by Khalid himself as he had a commerce and business studies background. The basic principles of the syndicate were that anyone can do business, contribute money, invite venture capital, rope in sponsors, collaborate with anyone and do anything that resulted in the business’s promotion and profit augmentation. A part of the profit margin would be invested in the syndicate’s coffers.
So Khalid could not force Dawood to exclusively do business with Galadari and not associate with any Pakistanis. In fact, Khalid never actually anticipated a scenario where Galadari and Dawood would not get along well with each other. But, at the same time, he could neither object nor insist on them becoming business partners and collaborators. However, Khalid was not exactly in a celebratory mood about Dawood’s new-found affiliations or friendship with the Pakistanis.
Khalid, in his experience and foresight, understood that soon the Bombay syndicate would be plagued by internal strife and competition, which is the bane of any organization, often weakening it and undermining its growth. Dawood was, by instinct, an impulsive man and felt that foresight had no room in business. It later became evident that Dawood’s impetuous decisions proved too costly for him in unimaginable ways. As Gautama Buddha once said: ‘Your worst enemy cannot harm you as much as your own unguarded thoughts.’
23
An Amicable Parting
It landed like a huge punch on his sternum. Khalid was incredulous with disbelief. The news shook him to his core.
‘Maal phir pakda gaya (The goods have been seized again).’
‘Arré, dekh kar batao, confirm karo, hamara hi hai ya koi aur boat hai (Please check again, confirm again, whether it is our boat or someone else’s).’
‘Bhai aapka hi maal hai (The goods are certainly yours).’
Unbelievable.
Impossible.
Such news and occurrences were normally anticipated in the smuggling business. The interception of a motorboat with a hundred or eighty jackets of gold once in a year was considered an inevitable loss and was written off in the books of the syndicate, with the loss normally shared among the partners and sponsors.
The syndicate worked on the margin of making enough neat profits from the nine shipments, so if they lost on the tenth one, they would find the grief acceptable. Gold smuggling, in those days, was the business of a chosen few who had the capacity to hedge their risks, handle losses and have the appetite for managing financial downturn in the business.
This particular call was different. It was no routine call of customs interception of their gold-laden dhow. This was the fifth such seizure of a gold consignment in a row. The amount of loss with each boat seized by the authorities was mind-boggling. The seizure of boat after boat and the incessant losses were heartbreaking and spine-chilling for everyone. Personally, Khalid was badly shaken by these developments. He had a vague sense of foreboding that someone was ratting on them systematically.
There was no way that the Indian customs had suddenly become so competent, vigilant and dexterous that they could score such consecutive successes. It was not a coincidence. This seemed like a well-planned and persistent enemy action with a clear-cut agenda to destabilize the syndicate.
Khalid decided to make a trip to Dubai and talk to Wahab Galadari. Perhaps he would come up with some solution. Galadari was
an astute businessman and was generally able to solve Khalid’s business complications in a jiffy. In fact, his company, A.W. Galadari Holdings, was considered to be the third-largest Arab investor in Singapore.
However, the last few months were equally turbulent and traumatic for Galadari too. Business experts and economists believe that he secretly harboured the desire to become the gold king of the world. The Indian media had already dubbed him ‘Goldfinger’, one of the most Machiavellian villains of James Bond movies. Galadari was just too much in love with the yellow metal. During his youth he used to smuggle gold in dhows and would even travel till Bombay’s coast—a feat which none of the Pakistani smugglers could ever replicate, or even wanted to.
Galadari passionately believed that the gold that first got him his millions was the key to increasing his multibillion-dollar empire. In February 1983, Galadari had launched an ambitious business plan of gold and silver futures, much like the New York one. Galadari could never believe that this would eventually turn out to be his Waterloo.
The idea behind trading in futures commodity is protecting the traders against the fluctuations in the market for a specific time period. This idea was floated way back in the early 19th century for rapidly shifting the prices of coffee plantations. This was later used for rice and wheat prices in most of the agrarian economies across the world, including India. In the Middle East, futures trading was being used for oil trading so as to prevent petrol prices from skyrocketing.
Inspired by the international markets and rising commerce, Galadari began using futures for gold and silver to hedge the risk of traders. It was a grandiose plan and needed the full support of the international markets. However, he received a lukewarm response for his schemes from the business community in the UAE. Soon, Galadari begin incurring massive losses in futures. The trade and commodity exchanges begin seeking the reimbursement of their losses. Galadari kept ignoring these escalating losses and, moreover, stubbornly continued to do business in gold and underwriting the risks of his dealers to his account. The business proposition protected his buyers but undermined his own wealth.
Galadari was pleased to see Khalid again. He met him with the same warmth and cordiality as usual. They discussed the declining business prospects for hours and also expressed concerns over the unfavourable market conditions. Galadari’s plummeting fortunes, spiralling debts, disastrous business decisions and sense of complacency in the face of dire crisis had blunted his sharpness. After hearing out the travails of Khalid, Galadari asked him to continue the smuggling and face the losses with gumption. ‘We shall overcome this together, inshallah,’ he said reassuringly.
Khalid was surprised at the older man’s stoic resilience and his sagacity in bearing the losses against all odds. With encouragement from Galadari, Khalid decided to persevere and continue smuggling.
The plans for the sixth trip of the motorboat were kept a secret. Khalid did not want anyone besides Dawood, himself and Galadari to know. Khalid believed that his goods were being seized and his boats getting intercepted because too many people knew about the operation. There were suspicions that one of the people involved in the project on either side was playing the snitch and tipping off the agencies.
Absolute secrecy and working on a need-to-know principle in smuggling ensures that the intelligence is never shared and the agencies never find out about the existence or transport of the gold. Khalid took every possible precaution in the smuggling world and he also brought his own pragmatic wisdom into play. He was confident of getting through this time.
But the sixth time too Khalid’s goods got confiscated. The motorboat was surrounded in the high seas. The moment it entered India’s territorial waters, the agencies swooped down on the boat and seized the gold consignment. When the call came, Khalid felt beads of sweat appearing on his forehead. He felt weak when he replaced the phone receiver in its cradle.
This could not simply be a streak of misfortune and bad luck. Khalid wondered about Dawood’s gold shipment loaded by the Pakistani smugglers reaching the desired landing spots without any hindrance or incidents. In the last few months, only Galadari’s gold had been seized. The principal losses belonged to the Galadari–Khalid combine and partially to Dawood. On the other hand, the Pakistani syndicate’s gold partnership belonged exclusively to Dawood and only part of it to Khalid. There clearly seemed to be some diabolical conspiracy aimed at wiping out Galadari and his share in the market. Once a giant like him, who was considered a golden whale in the ocean of smuggling, was eliminated, the seas would be totally open for the other players. It seemed to be the Pakistani syndicate’s well-thought-out stratagem to establish their hegemony.
The consistent seizure of every motorboat was a major setback to Khalid’s business plans and a financial blow to his sponsor, Galadari. But little did Khalid know that Galadari was bleeding not just on the smuggling front but in most of his other business ventures as well.
The London-based auditing firm Peat, Marwick, Mitchell & Co. (which was later merged and is now known as KPMG) had stated that A.W. Galadari would not survive unless it closed certain unprofitable businesses immediately and also sold off some top-notch properties in New York and London, including his penthouses.
According to a report, Galadari’s overdraft facility with his own bank, Union Bank of the Middle East, exceeded over 100 million dollars. This was reported to the UAE government, which had to step in to curb the spiralling crisis. Inquisition and monitoring bodies were immediately set up to resolve and redress the critical mess in the banking sector.
Wahab’s brothers Rashid and Latif rushed to their sibling’s rescue but could do little as his risk-taking abilities had gone beyond limits. The financial abyss that Galadari had sunk himself in was simply too deep for him to be rescued out of. Both the brothers had to sell off Galadari’s property development projects in Singapore and divest his stakes from other companies. Galadari was hurtling towards penury at an accelerated pace, and despite his brother’s help and the UAE government’s lenient attitude his troubles only got compounded.
The usually flamboyant and media-savvy Galadari went into seclusion. He cut down on meeting everyone and avoided public appearances and gatherings. For him, the end seemed to be nigh. Since his stupendous rise to power barely two decades ago he had never expected his downfall to occur in such a vicious manner.
Political experts and stalwarts of the Dubai market aver that some of Galadari’s undoing was precipitated by the local Arabs (or Watnis), who had been hostile towards him since the beginning as he was a naturalized Arab of Iranian origin and not a native of the UAE. So the ‘son of the soil’ issue was not just flagrant talk but a resurgent movement slowly assuming endemic proportions globally.
However, in November 1983, Galadari was removed from the chairmanship of his own bank and most of his properties, including his Hyatt Regency complex, were attached to recover the debt. He was eventually declared bankrupt and was also detained for a few months by the government.
Galadari sequestered himself from the world and started leading a frugal life on the subsistence allowance provided to him by the UAE government. He was reduced to a shadow of his former self, though both his brothers continued living opulently. In fact, Latif also visited India and, through his shrewd manipulative subterfuges, enabled a few legal cases to be dropped against his family.
On account of Galadari’s bankruptcy and retirement from active business, Khalid lost a bulwark of support in the UAE, and though he knew the Pakistani smugglers quite well, he still did not want to do business with them. Khalid was also sceptical of them and their motives. Despite his ancestors hailing from Pakistan, Khalid felt that aligning with them was tantamount to working against India.
Were the Pakistanis behind all the interceptions? Did they orchestrate the whole sordid drama in the high seas, and did they plan on repeating this ploy to push Khalid into a quagmire of losses and debt? Was this their ruthless way of bringing him to his knees and forci
ng him to work with their syndicate? Khalid had never found himself so perplexed and confused.
Khalid’s quandary worsened further when one day Dawood stepped into the office and saw Khalid in a pensive mood. After the initial pleasantries and small talk, Dawood initiated the conversation, ‘Bhai, hum log alag ho kar dhanda karte hain (Let us part ways and do business separately).’
‘Kyun, kya hua (Why, what happened)?’ Khalid asked in bewilderment; he felt that Dawood was not serious.
‘I think if we both run two gangs separately, it would be great for us. We would have two friends on different thrones calling the shots. Akhhe Bombay mein hum dono hi honge phir (It will then be only the two of us in all of Bombay),’ said Dawood.
Khalid dismissed the idea of the dissolution of their partnership. But Dawood’s suggestion had added fuel to the fire. It set him thinking. Subsequently, Khalid gathered that Dawood was getting influenced by the Pakistani smugglers. They were trying to plant seeds of separation in Dawood’s mind. ‘Tumhari gang toh Khalid chala raha hai, tumhari kahan chalti hai iss gang mein (It is Khalid who is running the gang, you have no say),’ was the chatter that reached Khalid’s ears.
Khalid was seething with silent rage and fury at the temerity of the Pakistanis. Khalid was the one who had introduced them to Dawood, and now they were trying to effect a split between the two friends for monetary gains. He did not want to separate from Dawood and wanted him to continue to be his friend and business partner. Khalid desperately wanted to make his gold smuggling from Dubai work.
But Khalid still wanted to struggle and prove his mettle in this crisis. He was the man who had singularly been responsible for making gold smuggling a highly lucrative business. He had introduced so many safety measures and smart methods to augment the profits at every level. But he hadn’t been able to figure out how things had gone so horribly wrong. Not once but half-a-dozen times in a row had his gold been confiscated, and this had not happened in his over-twelve-year career in smuggling. But Dawood, on the other hand, was managing to engage in all kinds of risky ventures with the Pakistanis, and he was getting it right all the time.
Dawood's Mentor Page 18