by Sonu Bhasin
Finally, Shah said, ‘Mr Dhingra, I have to pay you some money. About Rs 60 lakh. Tell me how you want it.’
‘Money? You owe me money? I don’t know you. Why do you owe me money?’ said Kuldip in a confused rush.
Shah looked at Menon in confusion as if he were checking if Kuldip had been briefed. Menon made a delicate gesture with his eyes to Shah to continue.
‘Berger made a property deal in Calcutta with me. This is the balance amount that is outstanding. I wanted to check with you if you want cash or . . .’ Shah trailed off as he saw Kuldip’s eyes grew intense.
‘What do you mean? Why will I want this money? This is company money. Why are you asking me this?’ thundered Kuldip. As he saw other people in the lounge look up to see and hear what was being said at their table, he lowered his voice. However, the intensity stayed. ‘Tu kya samajhta hai mujhe? Main company ke paise khaata hoon? Dafaa ho jaa yahan se. Chup-chaap cheque de de company ko [What do you think I am? Will I take any money that belongs to the company? Get out of here and give a cheque to the company],’ said Kuldip softly but fiercely.
Kuldip was still agitated as he told me this story. He glowered as I asked him, ‘What happened to Menon then?’
‘Kya hona tha uska? [What would have happened to him?] I knew what kind of a man he was. So I was careful afterwards,’ said Kuldip, cooling down.
There was also the incident of the Berger office in one of the landmark buildings in south Bombay. ‘Berger had a lovely office, very spacious, in that building,’ said Kuldip. Apparently, the owners wanted the space back. The agreement signed by Berger and the owners in the early 1950s had given a tenancy right to Berger.
‘Menon came and told me that the owner wanted to meet me,’ said Kuldip. Once bitten twice shy, Kuldip asked Menon for the agenda of the proposed meeting. He was told that the owner would request Kuldip to vacate the building. ‘The owner is ready to give you some money to vacate,’ said Menon, not having learnt his lesson.
‘Mainu paise dena chada hai? Maine nahin khaali karna [Oh so they want to give me money to vacate. I will not vacate],’ retorted Kuldip, upset at both Menon and the owner. He had refused to go to the meeting and told Menon to tell the owner that Berger would stay in the building.
‘Later I found out that the owner had filed a suit against Berger,’ said Kuldip. He gave instructions to Menon to make sure that Berger wins the case. ‘But Menon was quite sympathetic with the owners and wanted to curry favours with them,’ said Kuldip ruefully.
The personal ethics of some of the people in the management team were found wanting. At the same time the financial condition of Berger Paints, the company itself, was also found wanting by the new owner. ‘I was horrified to see that bahar se inni vaddi company aur andaron bilkul khokhli [such a big company from the outside but completely hollow from within],’ said Kuldip. There had been no financial due diligence conducted before the purchase and Kuldip had blindly walked into his new company. All he knew was that it was a multinational and had about Rs 90 crore of turnover. He also knew that it was run by professionals. Kuldip had assumed that Berger would not require much of his time. However, he realized within a year that without his time and guidance Berger could not even continue to do the business it was doing then. Fortunately for Kuldip this realization came alongside the Soviet Union breaking up. The full focus of Kuldip post 1991 would be on Berger.
By early 1992, the Russian business was winding down. While other exporters had taken a financial hit, Kuldip had walked away from the business with almost zero losses. One of the reasons for this is Kuldip’s ability to do business with great involvement but without emotional attachment.
Harman Dhingra, Kuldip’s nephew, speaking about the reasons for Kuldip walking away unscathed from Russia, said, ‘Kuldip chachaji told me that one should always keep an exit open under all circumstances. I really appreciate how he was able to swiftly exit Russian exports while others burnt their fingers,’ said Harman.
The business with Russia did not end but the orders had slowed down both in quantity and frequency. Orders with the new country were limited to paints. UK Paints as a buying agency for the Soviet Union had run its course.
But Kuldip was unfazed. ‘I thought that the best thing would be to route the orders through Berger as it would be in keeping with the corporate governance,’ said Kuldip.
Berger had been exporting paints during the 1980s. ‘But we did it only because the government wanted us to. The import licences were given in lieu of the export business. We certainly did not see it to be the kind of business that Kuldip managed to do,’ said Subir. ‘None of us saw the kind of opportunity that Kuldip saw in exporting white paint to the Soviet Union. He has an uncanny ability to sniff out the business opportunities in any deal. While some paint companies were exporting 100 or 200 tonnes of paint to Russia, Kuldip was exporting over 20,000 tonnes of White Synthetic Enamel alone!’ added Subir. Berger had the capacity and they took on the Russian business gradually over time.
With the Russian business sorted out Kuldip was now free to focus on the domestic business of Berger Paints.
Kuldip interacted with the Board of Berger once the deal had been made public. ‘People kept saying that the Dhingras bought Berger in 1991, but we had struck the deal verbally in 1990. It took almost a year for the paperwork to be done. So, in a sense, both dates are correct. I was allowed to interact with the company people only after the deal was made public,’ said Kuldip.
Vijay Mallya had laid down a condition in the agreement that Kuldip and Gurbachan could not meet anyone nor interact with any company employee till the deal was sealed and signed. ‘Maybe he was afraid of what we might find and walk away from the deal,’ said Kuldip.
Some people who were close to Vijay Mallya tried to reach out to Kuldip even while the paperwork was being done. ‘In fact one of the senior guys told me later that if we had reached out to him, he would have got us the deal much cheaper. But I did not meet anybody as ethically it would have been wrong. I had given my word to Vijay,’ said Kuldip.
He had agreed not to meet any Berger employee without the presence of Vijay Mallya but he also had laid down his condition. ‘I had told Vijay that he could not take any of the Berger people out of the company,’ said Kuldip. He had bought the company because he believed that the team was good. He also knew that Vijay had other companies as well as there were other operations of Berger in countries outside of India. ‘Jin logon ke peeche maine company kharidi hai unhi logon ko woh le jaaye? Phir kaise chalega? [I had bought the company because of the professionals. If Vijay took them all way, how would it work]?’ said Kuldip.
Vijay had listened to Kuldip and had said, ‘These people are not my slaves. How can I force them to do anything?’
‘You can’t force them but you have to promise not to take them away,’ countered Kuldip.
‘I certainly will not take them away. But if they, on their own, decide to leave you’ll just have to accept it,’ asserted Vijay Mallya.
Kuldip kept his promise and did not meet anyone till the deal was made public. Vijay Mallya remained the chairman and Kuldip Dhingra became the vice chairman of Berger Paints India.
‘I did not know how to deal with a listed company and boards,’ said Kuldip candidly. ‘Where had I dealt with true blue-blooded multinational listed-company people? And now I was the vice chairman,’ he added.
It is not easy to imagine the authoritative Kuldip as being iffy but the prospect of walking into the board meeting of his own company did give him a few butterflies in his stomach. However, he was comforted by the fact that Rajive Sawhney, his friend and lawyer, was by his side throughout the deal and thereafter. Rajive had been inducted into the board of Berger Paints. ‘Rajive has a great presence and he knew how a listed company worked. He knew what to do in a board meeting,’ said Kuldip.
Kuldip is a fast learner. Within a few months he understood the working of the company and also the working of the people. He re
alized that the company he had bought was different from the company he had believed it to be! The company needed help and it needed help fast. The downfall of the company had been taking place for some years but was hidden from the public eye.
As he interacted with his new teams Kuldip realized that Berger Paints had been drifting like a rudderless boat in a choppy ocean. Biji Kurien had got Vijay Mallya to buy the global operations of Berger in the early 1980s. Kurien continued to be the global CEO for Berger till Vijay Mallya decided to hive off the various parts of the company and sell them. London was the global headquarters of Berger and Kurien was in London for the better part of the month. He also travelled to other countries where Berger had operations. ‘As a result, the CEO really had no time for us in India,’ said Subir.
The almost leaderless team had decided to make the best of the situation. ‘The paints industry was not growing. There were no jobs outside,’ said Subir. The smart professionals looked around and had come to the conclusion that their situation was not all that bad. They had good jobs with colonial perks, the review meetings were formalities, some profits were being made, and the brand of the company was good. The only issue was that the company lacked funds for operations. Working capital was becoming a problem.
The tight financial situation led to a tightening of operations. Subir was the head of operations. He saw that giving credit in the market was a problem. ‘Dealers would book orders with us and tell us to send the material. When we asked for payments they would say, ‘Kal tak bhej denge’. But “kal” never came,’ said Subir. The credit management system was done manually which led to major delays in payments recovery resulting in serious working capital crunch hampering operations of the company. The major corrective step taken to rectify the problem was the introduction of credit management through the computer billing system allowing for no human intervention. This led to major improvement in credit control and helped the company to partially tide over the crisis. After Subir instituted a computerized credit system new orders could be booked by the trade only after they had paid for their earlier orders. Since the invoicing was all system-driven, beating the system was difficult. These and other initiatives kept the operations lean and mean.
Kuldip realized within the first few interactions with the company management that the reality was different from the perception. ‘I did not even dream that the company finances would be in such a mess,’ is all that he was willing to say. He was aghast to find out that salaries of employees were not being paid on time. The company needed the cash fast. This was an easy problem for Kuldip to address. The Russian exports had ensured that he could help their new company with it. ‘Salaries were being delayed and that was not good. I had to ensure that the funds required were given to the company,’ Kuldip said.
Kuldip also learnt a few life lessons while dealing with the professionals at Berger in the early years. ‘The grass is greener on the other side’, ‘all that glitters is not gold’ and ‘door ke dhol suhavane [distant drums are pleasing]’ are some truths that hit him as he went about taking charge of their new company.
While he had built a large business of paints and paint exports, Kuldip had not had formal business education. All he had learnt was by working on the job. He had grown up in his work life with a very healthy respect for the professionals. In his mind he had created a halo around all management professionals. This halo was punctured soon enough. He had believed that the professionals, with their management education and experience in working in professional companies, would be at least as good if not better than him in all matters. ‘But I was very surprised,’ said Kuldip with a tinge of regret.
Kuldip found even his initial dealings with the management wanting in detail and ideas. ‘They were afraid of taking risks. They did not want to think and do things differently,’ he said with almost a sense of wonder. ‘And they spent money almost without a care. Paise ka khayal kam tha un logon mein [they did not care about spending money],’ he added with some exasperation. Having come from a background where every rupee was spent after much thought, Kuldip found the approval for expenses process very shallow. ‘They were not able to come up with good explanations when I asked them why they wanted to spend that money,’ he said.
The paints business was, and continues to be, Kuldip’s life passion. He soon realized that as the new owners of Berger Paints, the Dhingra brothers would not only be required to bring in the required capital and expertise, but also passion for the paints business in his team of professionals. ‘Without passion how can anyone be successful?’ asked Kuldip as his forehead wrinkled up in a frown.
Passion would take time to build, but Berger Paints needed money immediately. The first capital infusion from the Dhingras came as a breath of fresh oxygen for the gasping operations. ‘We were happy that we could keep the operations going,’ said Subir.
The other problem plaguing Berger Paints was the supply chain issues. Berger had only one manufacturing unit in Howrah, West Bengal. This presented a problem as Howrah was at one end of the country while the products had to be supplied to all parts. It is not easy to set up factories in India in a short time. The management had believed that there was no solution other than contract manufacturing. However, with the Dhingras coming in as the new owners, the factories of UK Paints were available to Berger. Almost overnight, the team had access to new capacities.
Through all these small but significant changes Subir Bose continued as the head of operations and Kurien remained the CEO. ‘Kurien was older than Kuldip and was old school. Moreover, Kurien saw his role as CEO India as a downgrade as he had become accustomed to being the global CEO of Berger,’ said Subir. The Dhingras had given him a free hand to run the company but he left Berger in 1994. Subir Bose became the new CEO for Berger Paints.
Forty-three
‘I Wanted to Study More, Not Get Married!’
Kuldip had been immersed in this new business but it did not take his focus away from his family. Rishma, his eldest daughter, had finished her graduation from the UK and was back in India. She started working in Deutsche Bank in Delhi. Kuldip and Meeta believed that it was time for her to get married. Rishma, on the other hand, wanted to study more and do her masters. It is ironical that it was Kuldip who prevailed upon her to not study any more. He wanted her to look at the various rishtas that were coming their way.
It had been more than three years since the Dhingras had acquired Berger Paints. Kuldip, as the patriarch, was now firmly part of the corporate world. From a businessman he had become a corporate promoter. Mothers of eligible bachelors started eyeing the eldest daughter of Kuldip and Meeta with great interest.
‘I wasn’t interested in getting married at that stage. I wanted to study more,’ said Rishma. However, ironically Kuldip, who had once pleaded with his brother to be allowed to study, now wanted his daughter to get married. ‘I was the eldest and I think that was weighing heavy on his mind,’ explained Rishma. ‘It was a big bone of contention between us both,’ she laughed as she remembered the stormy arguments she had with her father.
There was one particular potential rishta that Meeta and Kuldip were keen on. Raninder Singh, son of Captain Amarinder Singh, had finished his graduation from the same university as Rishma was planning to go to. In fact, he had written a letter of recommendation for Rishma. ‘He did not know me but his aunt requested him and he wrote it for me,’ she said.
Raninder’s aunt and Meeta were friends. It was during an informal conversation that the topic of Rishma and Raninder came up. ‘My parents actually decided to send me to Buckingham University because Tikku [Raninder’s pet name]) had gone there,’ said Rishma. ‘It was only after I came back that I realized that kuch rishta-vishta ki baat hai [there was some talk of marriage]. Mom liked the idea and Papa liked it even better. No one listened to me,’ said Rishma plaintively.
Everyone was excited about Raninder because he belonged to the royal family of Patiala. His grandfather was the last maharaja of the
princely state of Patiala. Captain Singh, Raninder’s father, had gone to school with Rajiv Gandhi and was inducted into the Congress. He won his first election in 1980. However, after the Operation Bluestar in 1984, he left the Congress and joined the Akali Dal. In 1992, he broke away from the Akali Dal and formed the Shiromani Akali Dal (Panthic), which he later merged back into the Congress. At the time of writing this, he was the chief minister of Punjab.
Raninder Singh is the only son of Capt. Amarinder Singh and will inherit the honorary title of Maharaj Sahab from his father. The Dhingra family was very excited at the prospect of the rishta. However, they had to convince Rishma first!
‘My sister had met Raninder in the UK. I had not even met him when this rishta was being planned. I met him once when I came back to Delhi during my holidays,’ said Rishma.
When she came back to Delhi having finished her graduation Raninder met her again and took her out for dinner. ‘Then I was told that there was a dinner organized with the parents,’ Rishma added.
Before leaving for the dinner Kuldip asked his daughter, ‘What should we say in case Maharaj Sahab asks us about your decision?’
Rishma waved her hand expansively and told her father that nothing like that would be asked as Raninder and she had not even spoken about marriage.
The Dhingra family went to Capt. Amarinder Singh’s house in Delhi. They sat for a brief while after which the two families moved to House of Ming at Taj Mahal Hotel, Delhi. ‘It was at dinner that I realized that something was brewing. Maharaj Sahab ordered a bottle of champagne,’ said Rishma. The chilled bottle arrived at the table and Capt. Singh popped the bubbly. He poured the champagne into the crystal flutes and then raised a toast, ‘To Rishma and Tikku!’
‘Everyone had broad smiles on their faces. I looked at Tikku and he was also smiling. He winked at me!’ said Rishma.
Rishma later asked Raninder what was that about. ‘Oh, I was supposed to ask you before dinner but I forgot! So, I am asking you now,’ he said.