Takeovers from back then

INDEPENDENCE SPECIAL/ BUSINESS BARONS

R P GOENKA: Reminisces about paying the price for power.

On 3 October 1977, Rama Prasad Goenka was arrested by the police in Nainital.

The Janata Party government had launched a witch-hunt to nail Indira Gandhi and it suspected Goenka had helped her stash away misappropriated money. Accordingly, it had taken Gandhi as well as Goenka into custody.

Both were released within 24 hours and the charges did not stick. But for Goenka, it was just the beginning of a nightmare.

"Those were my most troublesome years. Between 1977 and 1980, I had become an untouchable in Delhi. Businessmen from Mumbai refrained from talking to me," remembers Goenka sitting in his spacious Alipore residence in Kolkata.

The family's awesome art collection hangs from every possible wall in the house. Books on Hinduism are neatly arranged in the room, a channel on a giant TV plays a religious discourse.

Goenka, now 77, says that his house and offices were raided no less than 44 times during those years by sleuths from the departments of income tax and customs as well as the Enforcement Directorate. No bank would lend him any money.

A grandson of Sir Badridas Goenka, the first Indian chairman of the Imperial Bank of India (now the State Bank of India), and the first son of Keshav Prasad Goenka, Goenka had become a member of the Congress as early as in 1950 when he was studying at Presidency College, Kolkata.

He was introduced to Gandhi in the late-1960s and she left a distinct impression on him. "She was the greatest leader of all times," Goenka says without a moment's hesitation, notwithstanding her anti-business policies.

Balmer Lawrie, a Goenka company, was nationalised during her reign "" the family's 51 per cent stake in the firm was acquired by the government at par. "I felt bad for two days but what could I have done?" he asks. Still, he had to pay a heavy price for his loyalty to Gandhi once the Morarji Desai-led government came to power in 1977.

In 1979, Goenka split from his two brothers, Jagdish Prasad and Gouri Prasad. Was it because his closeness to Gandhi had become a liability for the other two? "It had nothing to do with the raids," says Goenka, adding: "I told my brothers that I wanted to move out as I didn't see a future for my two sons (Harsh and Sanjiv) in the joint family. I was the bad boy."

In 1980, Gandhi returned to power triumphantly and Goenka was back in favour. The same bankers who had avoided Goenka like the plague were now willing to open their purse strings for him "" in 1983, he was even co-opted on the board of the Reserve Bank of India.

Over the next nine years, till V P Singh ousted Rajiv Gandhi to become the country's prime minister, Goenka did a series of high-profile acquisitions, earning him the reputation of being the country's top takeover tycoon. "Those were my most exciting years," says Goenka.

He started out with CEAT in 1981 "" it took him 12 visits to Turin to convince the Italian promoters to sell their interest in the Indian tyre company to him. KEC (1982), Searle India (1983), Dunlop (1984) and HMV (1988) were the next to fall to Goenka. The big year was 1989 when Goenka acquired CESC, Harrisons Malyalam, Spencer & Co and ICIM.

Goenka does not remember how much these acquisitions cost him. And all that he is willing to say about his tactics is: "I knew all the gimmicks and used every possible mean. But I was never hostile and refrained from changing the top management of the companies I acquired."

All his acquisitions, Goenka says, were driven by god's blessings and gut feeling. "When I acquired Dunlop, I hadn't even seen the company's balance sheet. But I knew that Dunlop's goodwill was very valuable."

In 1989, Goenka, however, lost Dunlop to Manohar Rajaram "Manu" Chhabria. "I didn't have the money to buy him out, though I still have some affection left for him," admits Goenka.

That was the year that Rajiv Gandhi was voted out of power. Next year, he handed over the reins of his business to his two sons. The two now run the Rs 11,500-crore RPG group.