Time to go home, Big Daddies!

A M Naik and Y C Deveshwar's longevity at the top of their respective firms stems from the govt's control over both L&T and ITC

This is something Time magazine wrote for Sachin Tendulkar. Let me try and rewrite it for corporate India. 

“When Anil Manibhai Naik first turned up to work for Larsen & Toubro as a junior engineer, Mukesh Ambani was a eight year old school-goer in South Bombay, Kumar Mangalam Birla was yet to be born, Warren Buffett was about to write the first of his fifty legendary annual letters, JRD Tata was in his prime, and Lal Bahadur Shastri was our Prime Minister. 

“When Naik went about engineering his way up at the behemoth, the e-commerce billionaires of today were just a dream in their parents’ minds. Forget computers and smartphones, few people had seen telephones those days. India had just won a war and was on the cusp of diving into a socialistic overdrive. Neil Armstrong was yet to land on the moon. It seems while Time was having his toll on every individual on the face of this planet, he excused one man. Time stands frozen in front of Anil Manibhai Naik. We have had great corporate leaders, we have had legends, but we have never had another Anil Manibhai Naik and we never will.” 

Last week, Naik got 3,000 of L&T employees to celebrate his completing 50 years in the company and threatened them with more. He hummed “Jeena yahan marna yahan iske siwa jaana kahan (’Tis but our fate to live and die here/Where else do we have to go?),” according to a Business Standard report. 

If there is one man in corporate India who could fit a similar description, it would be Yogesh Chander Deveshwar of ITC ltd. Deveshwar joined the tobacco giant three years after Naik joined L&T. So, Birla would have been a toddler and Indira Gandhi would have replaced Shastri, but pretty much everything else in that paraphrased Time passage can remain as it is. 

Naik is 72, Deveshwar is five years younger. Both went to good institutions. They have worked hard and deserve every award and accolade they have received over the years like few others can. They both rose through the ranks and won the right to lead their organisations. While Deveshwar reached the top post in 1996, Naik’s turn came three years later. They have made the companies they led into not only the best in the country but also world beaters. 

But is that reason enough for refusing to retire well past one's prime? Fifty years in a company and over 15 years at the top post? That, too, in a country that boasts of the youngest population in the world. Imagine the plight of the next man in line: he will have to longingly watch people young enough to be his children and sometimes even grandchildren getting an opportunity to lead elsewhere. We must be kidding ourselves if it were to be suggested that the duo are irreplaceable. Nobody is irreplaceable, not even the great Sachin Tendulkar. 

In the supposedly meritocratic world of corporations, how is this even possible? Like most things wrong in this country, the blame lies at the doors of the government. 

There might be other older people in business. But Naik and Deveshwar stand out because they are not owners. Despite being professionals with little or no shareholding in their companies, they have been able to stay at the helm simply because there is no one above to ask them to leave. 

Both ITC and L&T do not have any identifiable ‘promoter’. In both companies, state-controlled institutions such as Life Insurance Corporation of India (LIC) and Special Undertaking of Unit Trust of India (Suuti) control significant stakes. In addition to these, some state-owned general insurers also own shares. Thus, between them, these institutions control over 26%, the minimum holding required to veto significant moves in both companies. They also act as a major deterrent for any potential acquirer. Therefore, the longevity of Naik and Deveshwar can be seen as testimony to the good rapport and relations they enjoy with the government of the day. 

But why is the government being the elephant in the boardroom of a tobacco maker and bridge builder? Despite all talk of liquidating Suuti, the government has been dragging its feet for years now. The value of this holding continues to go up every year. Suuti has long outlived its purpose. It is time to dismantle it. An auction could be an ideal method. The Modi government would get several thousand crore to deploy in its pet projects and a definitive owner would emerge, who can finally send these grand old men home. 
(N Sundaresha Subramanian is Associate Editor at Business Standard)