 "Pawan Ruia")
It is the day after Diwali. Offices are empty. Kolkata is still recovering from a night of revelry: lighting crackers, eating sweets, playing card games. The gatekeeper of Ruia Centre at Park Circus is visibly upset when I turn up for a meeting with his boss, Pawan Kumar Ruia — there is no respite, either for him or for Sahib. There are no signs of irritation on Sahib, though. Ruia, 55, is dressed formally. As always, a thick red tilak sits on his forehead. He switches on the lights and the air conditioner. The office, adorned by paintings of such masters of the Bengal School as Nandalal Bose, Jamini Roy and Prakash Karmakar, suddenly comes to life.
I am here to quiz Ruia on his recent letter to West Bengal Labour Minister Purnendu Bose, seeking his permission to shut down the Jessop & Co factory in Kolkata, the country’s oldest engineering firm and one of the last remaining industrial units in the city. At a meeting held in Bose’s office on October 30, the minister had chided the company’s management for planning to downsize the workforce and, in a fit of anger, had asked why Jessop didn’t shut the factory if it couldn’t run it. Ruia had called the bluff and offered to down the shutters. The minister piped down. Ruia too has indicated that he is open to negotiations. Will Ruia have his way? Or will the West Bengal government, led by the firebrand Mamata Banerjee, make the Marwari chartered-accountant-lawyer-businessman blink?
Jessop was Ruia’s claim to fame. He had acquired the sick company from the government (for Rs 18 crore) in 2003 and made it profitable in just one year. This, mixed with some smart public relations, earned him the reputation of a turnaround expert. In 2005, he had bought Dunlop from the family of Manu Chhabria (he outbid the Singhanias of JK Tyre and the Munjals of Hero) with the promise to make it profitable instantly (“We don’t really have to turn around Dunlop. It will make profits from the day we restart production,” a 2006 report quoted him as saying). In 2007, he indeed brought the company out of the purview of the Board for Industrial & Financial Reconstruction by revaluing its fixed assets (a company is officially sick if the net worth is fully eroded). Ruia went on to turn around two more companies: Falcon Tyres (also acquired from the Chhabria family in 2005) and Monotona Tyres (from Dipak Poddar in 2006).
But that reputation is now under threat. Jessop is mired in labour strife, even if the threat to close it is just posturing. Ruia is contesting the Calcutta High Court’s decision to wind up Dunlop’s Kolkata unit in the Supreme Court. Five automotive companies he had picked up in Europe (three in Germany, and one each in the United Kingdom and Turkey) between 2008 and 2010 have all been sold off. Could this have a bearing for his application, through a non-banking finance company called Suryamani Financing Company, for a bank licence to the Reserve Bank of India? Ruia is confident that he will get the licence. “RBI is sending queries to us as a part of the process; we are replying to all those,” says he. A bank will catapult him into the highest league of Indian business.
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Over the next hour or so, Ruia parries questions related to Jessop, West Bengal politics and the way ahead for him. If he is facing rough weather in business, he doesn’t show it. He is calm and assured. But then he has always been media savvy and has a way with words. So, where did the street-smart Marwari go wrong? Not many in Kolkata know the full story. That’s because Ruia is seen in the city’s business circles as a loner — someone rarely seen at social dos. He does not appear to be a mover and shaker even in the close-knit Marwari community of Kolkata. That’s perhaps why last year, when Chief Minister Banerjee had imprisoned Marwari businessmen for a hospital fire, though Bengali executives were left untouched, the whole community spoke out in protest except Ruia. Those close to him say he chooses to remain engrossed in his work. This, they say, gives him the time to micro-manage the affairs of his companies. “Every detail of each company of the group is at my fingertips,” Ruia admits.
Ruia began life at Pipri in the Mirzapur district of Uttar Pradesh, where his father worked in a chemicals company. The Birla family (undivided at that time) had a textile unit at the same place. By one account, the image of that thriving factory and the fabled wealth and power of the Birlas had fired young Ruia’s imagination. There was little to say if he had a head for business in those days. One talent that was evident to all was badminton: Ruia played for Uttar Pradesh.
In the 1970s, the family moved to Kolkata and Ruia enrolled in the prestigious St Xavier’s College. Till he bought Jessop in 2003, Ruia was living a life of anonymity. That one deal pushed him on to the national stage. Since then, Ruia has grown his business from scratch to Rs 2,500 crore. He lives in the upscale Sunny Park neighbourhood with his wife, three daughters and son, starts his day with puja, followed by a walk in Calcutta Cricket & Football Club, one of the oldest clubs in the city, and is known to be partial to masters of the Bengal School, which is in ample evidence in his well-appointed office.
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But his critics question Ruia’s style of doing business. “I worked with him when he was at the top of his success. He was not ready to provide working capital,” says a former Jessop executive. Other former staff members recall how difficult it was to persuade Ruia to shell out money even for necessary machinery like welding equipment for the plant. “On the face of it, he is the most polite person I have come across. But doing business with him or for him was a tough task. The purchase manger had to pursue him till late night even for clearing a small bill,” says another executive who worked with Ruia. Workers go a step further in their allegations. “When he first came here, he came across as a saviour. But now we realise, at both Dunlop and Jessop, he was waiting all these years for all the workers to retire so that he could take charge of the real estate,” says Bitan Chowdhury, a former Dunlop worker and trade union leader.
Though Ruia has always denied such allegations vehemently, the most scathing observation came from the Calcutta High Court in its order on winding up the Dunlop factory, which was later stayed by the Supreme Court and the case is likely to be taken up again in April. In his order of March, Justice Sanjib Banerjee observed that the management was treating the company as a “cash cow”, and the assets of the company are “in serious jeopardy in the hands of those at present responsible for protecting (them).”
Many believe that there is a political angle to the whole Jessop controversy. Ruia was perceived to be close to the earlier communist regime in the state (one report mentions that he would sort out issues directly with the then chief minister, Buddhadeb Bhattacharjee, and his industry ministry, Nirupam Sen) and is now paying the price for it. The agitating workers at Jessop are widely believed to be backed by Trinamool Congress MP Saugata Roy. “Somehow there is a wrong perception among many that I do not have a good equation with the present government and local authorities. This has adversely affected my business in the state,” says Ruia.
Like most practical businessmen, Ruia has friends across the political spectrum. He had said in an interview after acquiring Dunlop: “(Then) Defence Minister Pranab Mukherjee has assured me that he will extend all possible help to see that Dunlop turns around.”
Has this backfired on him in the vindictive world of West Bengal politics? “We,” says a Trinamool Congress minister, “are frustrated with this man.”
