The Diminuendo

round 1857, Delhi had three prominent business families: the Chunnamals, the Saligrams and the Gurwales. When the British took Delhi in 1858, their fates changed forever: Gurwale was hanged publicly because he donated generously to the last Mughal emperor, Bahadur Shah Zafar. The fate of Saligram is unknown, writes Vinay Bharat Ram in this biography of the pre-Independence business dynasty of Shri Ram, the founder-patriarch of the Delhi Cloth and General Mills (DCM) group. As for the Chunnamals, their decision not to support the poet-emperor saved their lives.

Amazingly, a generation later, scions of some of these families resurfaced when DCM was born in 1888. The five founders of the joint stock company to finance a textile mill included a Gurwale, a Chunnamal and Gopal Rai—the latter from a part of the family into which Shri Ram was born. Again, there’s a twist in the tale. Srikrishna Das Gurwale, the founder of Hindu College and the first chairman of DCM, ran into financial problems. He died in debt in 1915—“Sad to say, his descendants run a tea stall in Delhi’s Chandni Chowk”, writes Bharat Ram.

These brutal history lessons are a reminder of how lives and fortunes change dramatically. Particularly in Indian businesses, where the overwhelming majority are of the “family model” with all its baggage: generational gaps, differences of opinion, sibling rivalries and messy splits. Only a few families make it past the third generation, with their reputations and businesses intact. The mighty DCM group—with interests spanning textiles, sugar, chemicals, engineering and more—is now a shadow of the conglomerate that was India’s fourth-largest business house in the 1970s.

Even before liberalisation took flight in 1991, the group was in trouble. The slow decline of textiles from the mid-’70s precipitated a messy, three-way family split in the late ’80s (the empire was carved up among Shri Ram’s three sons—Murli Dhar, Bharat Ram and Charat Ram). But there was more to come for the Bharat Ram chapter, the custodians of DCM. Mounting financial losses tore through the DCM group like a tsunami, practically destroying any diversifications and prompting another split between the Bharat Ram brothers. The famous Lal Kothi, the Bharat Ram residence on Delhi’s Sardar Patel Marg, eventually had to be auctioned off.

It was a brutal fall from grace. This, then, is Vinay Bharat Ram’s brave attempt to tell the story of a crumbling business empire. It’s an engaging read, littered with references to musicians, economists and modern-day kings. Bharat Ram is disarmingly frank. “In retrospect, I do believe I could not steer the board meetings as effectively as I would have wanted to.” Which CEO would write like this? Of course, this is his version—his uncles (now deceased) and brothers would surely have had a different take.

As the book points out, secure in the licence permit raj and the khata system (managing accounts), the group gave short rope to new-age diversifications. By the mid-’70s, DCM’s distribution model was in terrible shape with high labour costs, cash blockages and malpractices. The malaise in textiles wasn’t unique to DCM—the family was slow to see the writing on the wall until it was too late. More importantly, the group didn’t professionalise management. Though it had the coveted DCM Senior Management Training Scheme, allegiance to the owners was paramount. This perpetuated fear. One story went thus: Charat Ram’s picture was put up in the office bathroom to “ease the rite of passage”.

This mindset percolated to the younger generation. “I was sceptical, since I did not believe that a traditional, family-run company could be professionalised by fiat. It would require a long-drawn cultural transformation,” writes Bharat Ram. It’s telling that even with new-age diversifications like DCM Data Products (which made the country’s first microcomputers in 1975), key employees like Shiv Nadar left to find success with HCL Technologies. Plus, a general short-term approach put paid to ventures like DCM Toyota, which faded away.

Post-liberalisation, DCM’s mounting debts were accentuated by delays in freeing the land development of the mill complex in Delhi’s Bara Hindu Rao complex. Now, after decades, DCM is a debt-free company. The mill development project is under way, though majority control now lies with the Singapore partners. Perhaps there will be a better future for the DCM scions. Who knows? As for the author, he’s happiest discussing his musical and literary accomplishments. That’s his true legacy.