I doubt if any investment analyst tracks DCM these days. It is not an actively traded stock and DCM stopped hitting newspaper headlines decades ago. Few will know that it was North India’s first textile factory, one of the earliest joint stock companies in the country, a one-time blue chip, a nursery for talent like Shiv Nadar and Ashok Soota, and a business partner of Toyota.
What went wrong? This is the question that Vinay Bharat-Ram sets out to answer in his autobiographical work, From the Brink of Bankruptcy: The DCM Story. Even as you turn the last page, you realise that there are no convincing answers. One reason perhaps is the “amicable” family split of 1989, though the seeds of discord were sown many years ago.
Lala Shri Ram, the man who made DCM a household name, died in 1963, entrusting the business to his two sons — Bharat Ram and Charat Ram. (He had a third son, Murli Dhar, who died in a plane crash near Karachi immediately after Independence. DCM used to run a textile mill at Lyallpur, which was under Murli Dhar’s charge; he was on the flight from Lyallpur to Karachi to buy jewellery for his son Shri Dhar’s wedding and perished in the accident along with his wife.) The two brothers were as different as chalk and cheese. While Bharat Ram was the public relations man, Charat Ram ran the operations efficiently.
By the mid-1970s, when Bharat Ram was in his early sixties and Charat Ram in his late fifties, the younger brother began to put pressure for a change of guard in order to stem the rot in the company’s finances. Things came to such a pass that by 1984, Bharat Ram had made up his mind to step down. Vinay Bharat-Ram, fully aware that he wouldn’t be able to survive for long with his uncle in charge, suggested a coup of sorts to his father. Thus, at a board meeting, Bharat Ram suggested that both Charat Ram and he would step down, paving the way for the next generation – Bansi Dhar (Murli Dhar’s son) and Vinay Bharat-Ram.
This was unacceptable to Charat Ram. He demanded that he be allowed three years to turn DCM around, and he blamed Vinay Bharat-Ram for the bad fortunes. Bansi Dhar, Charat Ram argued, wasn’t ready for the responsibility. Nevertheless, Charat Ram lost the boardroom battle. But the fissures ran deep; a few years later, the family split three ways: Bharat Ram, Charat Ram and Murli Dhar’s sons (Bansi Dhar and Shri Dhar).
By then, textile was on a decline. Labour unrest and technological obsolescence had taken their toll on the business. Vinay Bharat-Ram had tried for long to shut the mills and use the real estate for other purposes. But his hands were tied by the labour rules of the time. In the partition, the money-making businesses like sugar, chemicals and vanaspati ghee went to others; what was left behind in DCM and was inherited by Vinay Bharat-Ram included the mill in Delhi and a foundry in Punjab.
At this juncture what kept Vinay Bharat-Ram going was DCM Toyota, the venture formed in the 1980s with the Japanese car maker for light commercial vehicles. But there too, once the initial euphoria was over, the bottom line began to shrink. Vinay Bharat-Ram says it was because Toyota didn’t trust Indian components and resisted all attempts to indigenise. The depreciation in the rupee vis-à-vis the yen made matters worse. Vinay Bharat-Ram was summoned to Japan and made to sign a statement that he would bring down costs by Rs 2 crore per annum. By the early-1990s, DCM Toyota was almost sick. It required equity infusion desperately. Toyota had lost interest by then, so the burden fell on DCM.
Around that time, armed with a letter of recommendation from R C Bhargava of Maruti Suzuki, Vinay Bharat-Ram went to Seoul in search of orders for engine blocks for his foundry. One thing led to another and soon Daewoo became his partner in India to make cars. For a few years, things seemed to be going well. DCM Daewoo offered the first tough competition to Maruti Suzuki in India with its Matiz small car and Cielo sedan. Then Daewoo went belly up and the joint venture slipped into oblivion.
What proved the final straw for DCM, according to Vinay Bharat-Ram, was the partially convertible debentures that the company was forced to issue in the early 1990s. This raised the debt on the company’s books from Rs 50 crore in 1991-92 to Rs 400 crore in 1997-98. The pressure, he says, came from his youngest brother, Vivek. According to Vinay Bharat-Ram, Vivek was a close friend of Rajiv Gandhi, who had become prime minister in 1984, because the two of them had studied together in Doon School. This, he alleges, went to Vivek’s head and he began to throw his weight around. The debentures too, he adds, were Vivek’s idea. The issue, incidentally, was handled by Harish Bhasin — Swraj Paul’s broker when he had wanted to acquire DCM in the mid-1980s. In 1999, there was another separation of ways. Vivek went his way with DCM Financial Services and DCM Benetton, while Arun, the third brother, got control of SRF.
It may be partly candid and partly contentious, Vinay Bharat-Ram’s book sure reads lucid. Two traits run through the DCM family — one is either a workaholic or an aesthete. Murli Dhar and Shankar Lal, Lala Shri Ram’s younger brother, were Urdu poets of distinction. Vinay Bharat-Ram is a bit of both — a musician as well as a businessman. In these mean times of cut-throat rivalry, one cannot afford to be both.
FROM THE BRINK OF BANKRUPTCY: THE DCM STORY
Vinay Bharat-Ram
Penguin
201 pages, Rs 499
