The Man Behind the Wheel: How Onkar S Kanwar Created a Global Giant
Tim Bouquet
Rupa Publications; 296 pages; Rs 595
Onkar Singh Kanwar of Apollo Tyres is that rare breed of businessmen who shoot straight from the hip. He speaks freely and refuses to lace his words with diplomatese, qualities that make him extremely likeable. His biography, too, is like the man: Straightforward and open. It makes no attempts to sweep under the carpet unsavoury controversies that have dogged the company and the Kanwar family from time to time. The result is a delightful story of ambition and pride.
Tim Bouquet is no stranger to Indian business, having authored Cold Steel, an account of Lakshmi Niwas Mittal’s acquisition of Arcelor. He understands the nuances of Indian family business and politics quite well. As a result, there is hardly a dull moment in the 262-page book.
Mr Kanwar’s father was Raunaq Singh, the quintessential relationships man. He would always make time for journalists. A visit to him would invariably be rewarded with a bunch of stories. It was not in his nature to sit idle. Very late in life, a few years before his death in September 2002, he was drawing up plans to set up a steel mill. “Loha banayenge,” he had told me in his old-fashioned office in the Connaught Place area of New Delhi.
Not just journalists — politicians, too, would eat out of his hand. He was extremely close to Indira Gandhi and was one of the few businessmen who had direct access to the prime minister. Then there were other politicians, too, who thought well of him.
At a party held in Kerala House, sometime in the mid-seventies, Achutha Menon, the Communist Party of India (Marxist) chief minister of Kerala, asked him to take over the licence of a company called Ruby Rubber which had sat on it since 1972 — the oil shock had disrupted all its plans. This was the time the government had handed out new licences to Modi Rubber and JK Tyre. Kerala produced 90 per cent of India’s natural rubber. Raunaq Singh, “buoyed by three whiskies and hip-shooting confidence”, agreed there and then to take over the Ruby Rubber licence. That’s how Apollo Tyres started.
Meanwhile, trouble was brewing for Raunaq Singh in New Delhi. Indira Gandhi had been ousted by the Janata Party, and the new firebrand industry minister, George Fernandes, blamed Apollo Tyres of financial mismanagement and pressed for its nationalisation. What made matters worse was that Raunaq Singh had made investments in Sanjay Gandhi’s ill-fated Maruti Motors. In September 1978, Fernandes ordered that the company’s management be taken over by the government. Raunaq Sungh’s passport was impounded.
Soon, Indira Gandhi returned to power and Raunaq Singh was back in favour. By now, the Apollo Tyres case was in the Supreme Court. Fed up of the long delays, Raunaq Singh advised his son, Mr Kanwar, to sell Apollo Tyres for one rupee and cut his losses. This is when Mr Kanwar offered to run Apollo Tyres on the condition that none of his half-brothers would be allowed into the company. Raunaq Singh agreed. Mr Kanwar relocated to Kerala, rolled up his sleeves and got down to resurrecting Apollo Tyres.
Over the years, he turned Apollo Tyres into one of India’s largest tyre makers.
However, in a few short years after he had turned Apollo Tyres around, father and son had an infamous altercation. While Apollo Tyres, under Mr Kanwar, was growing by leaps and bounds, the other companies of Raunaq Singh had run into rough weather. Raunaq Singh wanted to use Apollo Tyres’ cash flows to revive the other companies and diversify into new areas. But Mr Kanwar, wisely enough, did not accede to his father’s demands. Perhaps Raunaq Singh felt that Mr Kanwar was not doing enough for his half-brothers.
The fight was prolonged and nasty. Mr Bouquet tells us that there were times that Mr Kanwar even feared for his life and had to accordingly take precautions. The spat even took a toll on his health and Mr Kanwar suffered a heart attack. The Apollo Tyres board consistently backed Mr Kanwar and Raunaq Singh had to eventually bow out.
Mr Kanwar hit global headlines when he attempted to acquire Cooper Tire of the US in 2013 for $2.5 billion. The announcement came in June and the deadline for deal closure was set at December — so confident was Mr Kanwar that all the loose ends had been tied.
Cooper had a partnership in China. Unknown to Mr Kanwar, the Chinese partner, Che Hongzhi, too had made an offer to buy out the American tyre maker, an offer that was spurned by the Cooper management. Feeling slighted, he decided to make things difficult for the Apollo-Cooper deal. The Chinese workers went on strike, which Mr Bouquet says may have been instigated by Che himself. If China was out of the deal, the valuation would have to be drastically reduced. That was the first roadblock.
The next was put up by the Cooper workers’ union in the US which demanded a new wage agreement. Finally, as the cost-benefit equation threatened to go haywire, Apollo Tyres walked out of the deal.
Apollo Tyres’ journey is a shining example of how family businesses have evolved over time: From the days of Raunaq Singh, when political connections alone mattered, to those of Mr Kanwar, when companies were largely production-driven, to now when the dividing line between fast-moving consumer goods and tyre companies has got blurred.
