Now that he's about to retire, HDFC's chairman says his biggest challenge will be to not interfere in the institution that is almost synonymous with him.
It will be hard to imagine the financial world without Deepak Parekh being in the thick of things. But HDFC’s chairman, who turns 65 this Sunday, says he’s had his innings. A man for all occasions and a trouble-shooter beyond comparison, Parekh was reluctant to give up his bridge session, a regular feature of his Saturdays, to do ‘Lunch with BS’. So, instead we decided to settle for coffee at his office in the Churchgate area in Mumbai. Parekh, who thrives on work, tells Shobhana Subramanian his biggest challenge will be how not to interfere in HDFC.
So how does it feel to be turning 65, I ask. “When I was 60 I felt like 40, so I’ll probably feel 45 soon,” he chuckles, adding that he’s been lucky with his health so far, otherwise he would never have been able to cope with so much travel. Parekh’s almost philosophical about the retirement, saying no one really wants to know a person once he steps down from an executive position.“It’s a fact, you really get to know who your friends are, whether it’s among business associates or within your own company,” he says. Apart from being looked up to for his knowledge/importance with financial world, Parekh is also much sought after in Mumbai because he is a trustee of the Bombay Scottish school — and so can help get admission in that prestigious school. He is dismayed that the school he went to, St Xaviers, is no longer what it was and says HDFC has been toying with the idea of starting schools. Not elitist institutions charging fancy fees but not charitable either. The understanding of the real estate business, which is the biggest constraint today, he feels, should give HDFC the edge when it comes to running schools in the housing complexes that it funds.
Indeed, it’s a pity he says that acquiring land today is so difficult and that there are so many land aggregators who deprive farmers of their rightful dues and make relief and rehabilitation such a big issue. “We need to pay market rates or even a premium for land, but we try to get it at a lower price so it never works and then there’s litigation, unhappiness and obstruction,” he says. Parekh’s equally exasperated that centre-state relations and vested interests are holding up the infrastructure build-out in the country and suggests an implementation ministry to fast track projects above Rs 5,000 crore. Would you like to take on the job ? No thank you, he says, it has to be done by a politician because he needs to deal with chief ministers. “Unless you’re a senior politician, attached to the PMO, it won’t work, because otherwise, no one listens.”
The coffee and biscuits arrive but Parekh declines both; though he’s fond of them, he’s trying to avoid both tea and coffee these days — but he’s looking forward to a few beers and lunch and, of course, the bridge session. Unfortunately, the work overload has left him with time only to read newspapers and magazines. As he reads a whole lot of them, he wishes the media wouldn’t go overboard the way it has with far too many television channels and newspapers. “Any news is news today, we need to become more sophisticated. Today, anyone can become a builder without even a background in civil engineering or architecture and similarly anyone can become a journalist. I’m putting you in the same category.”
In all these years, Parekh’s never missed out on Warren Buffet’s annual speeches: “I love the speeches, they’re so educative, it’s nice to know how the old man thinks”. And he’s been more than inspired by Peter Drucker, and amazed at how the Drucker principle is playing out in India, with so many middle-level managers having reached their level of competence. “We don’t have a social security system in India and we’re not ruthless either, so we can’t just throw them out. But that’s what is creating flab in organisations and there’s no solution in sight. I see it in many of my senior- and middle-level people and I’m sure they too would admit it, but they have 10-15 years to go,” says Parekh who’s also wondering what people are going to do for 20 years after they retire, now that longevity is increasing. “You need a second profession or some strong areas of interest after you retire. I sometimes worry that after I retire, I may age faster.”
Which is why Parekh says he needs to find something to do. “My biggest challenge now is how to be a non-executive chairman of a company that I have run for so many years. It’s probably my weakness that I can’t detach myself completely at one shot, like some PSU bank chairmen do. If I did that it would probably kill me. But I want to behave like a non-executive chairman, I have to find something.”
Would he like to join politics? Parekh dismisses the idea, nor is he interested in doing a project like the one Nandan Nilekani is handling. But he says sometimes he regrets, though that may be too strong a word, that he let go several opportunities to join PSUs in the financial sector space. Why would you want to work in the public sector, I ask. “Somewhere I felt the system needed to be changed and I wanted to be part of the change,” he says. So I always wonder whether I should have done that ten years ago?
Is that possible with the way politicians control everything? Parekh believes it is possible to manage politicians, and says while they can be unreasonable, it would be wrong to say they are always a bad lot of people. He’s also happy that there are business people who have not compromised on ethics but have nonetheless succeeded and is concerned that the fabric of society is deteriorating, as reflected in the large number of credit card defaults, bounced cheques and minor frauds.
Did companies go overboard with acquisitions overseas? Parekh says there are very few managements he knows who acquired a company and said they were pleasantly surprised at what they got. “You always find some skeletons. At HDFC, we acquired Times Bank, Centurion Bank and Home Trust and in all three we felt there were things we were not aware of. Daichi Sankyo has written off $2 billion in its balance sheet, so the pain could be longer but that’s the way it is.” Parekh’s not convinced the country’s ready for capital account convertibility just yet and believes that to have allowed it just to ease the way for the Bharti-MTN merger would not have been the right way to go about it. Instead, he feels there could be a road map with a four to five year horizon.
Parekh regrets that his work hasn’t given him enough time with the family. Now that his second son will be back in India, he hopes to make amends. And he’s definitely looking forward to seeing more of granddaughter Amaya.
