A fighter, a rebel, vengeful, a loyalist. The grandson of Jinnah, the godson of JRD Tata, the chairman of Bombay Dyeing & Manufacturing Co. Ltd. The heir apparent to the Tata empire, the prodigal manager, the controversial CEO. False passports, flamboyance, flirtations. A Pakistani spy, Dawood links, an anti-national. Just who is this man?
Plonked right in the centre of yet another storm, Nusli Wadia, 53, attracts controversy like no other CEO, no other man. Last week, when The Indian Express published a tapped phone conversation Nusli had with Ratan Tata, Keshub Mahindra, Jayant Malhoutra and Field Marshal Sam Manekshaw, the resultant corporate upheaval might have unnerved anyone else. Not Nusli.
With him, it's a habit. Right from 1971, when his father Neville and Pallonji Mistry—the majority shareholder of Bombay Dyeing—decided to sell the company to R.P. Goenka, and Nusli disagreed, he inherited his loudest inheritance: a label of a fighter. Then he got JRD Tata, his mother, sisters and even the labour union to successfully thwart the sale. The 1980s were devoted to the Ambanis, where early polyester filament yarn (PFY) skirmishes gave way to the DMT-PTA license war followed by another one in the media. The ash of the Ambani feud hadn't yet cooled when control of Britannia brought him into an open slanging match with Rajan Pillai, now deceased, then the chairman of Britannia Industries.
The 1990s have been even more potent. A whirlwind of controversies have sucked in the scion of one of the oldest business families in India. From being called anti-national to a Pakistani spy to a philandering tycoon having connections within the underworld and film starlets, Nusli has also been accused of clearing off the Indian Express patriarch Ramnath Goenka's money parked overseas illegally. The latest phone-fixing deals, with Tata Tea at the centre, all but adds to the persisting stories of Nusli's political nexus.
Part of Nusli's political charm is, of course, inherited—he is the grandson of Jinnah from his mother's side—but that is not the part which he has exploited. The genesis of his political connections are intrinsically linked to his association with Ramnath Goenka and his newspaper. Said Nusli in an earlier interview: "I treated Ramnathji as a second father. It was a very close relationship. Unfortunately, people see motives in relationships." Goenka made him a director of Indian Express. Proximity to Goenka and the anti-establishment newspaper left its mark on Nusli. His association with politicians like Jayaprakash Narayan, Nanaji Deshmukh, L.K. Advani and A.B. Vajpayee fuelled the fire. "I have known people who are now in the BJP for years.... So having an association with them or knowing them doesn't mean you subscribe to all their political views," said Nusli a few years ago.
Nusli is also said to have been instrumental in V.P. Singh's decision to hire Michael Hershman's detective agency, Fairfax, to investigate Reliance's dealings with Du Pont and other violations of FERA. Between December 1986 and January 1987, however, an alleged compromise was brought about between Ambani and Rajiv Gandhi. V.P. Singh was transferred to the defence ministry; soon after the Indian Express guest house in New Delhi was raided. The CBI claimed to have discovered a letter written by a Fairfax vice president stating that Nusli had paid US $300,000 for the conduct of the investigation and that another US $200,00 was due. The letter was ultimately proved to be a forgery.
In August 1987, the CBI arrested Nusli for allegedly registering as an Indian national in a hotel while holding a British passport. In April 1988, the Enforcement Directorate issued nine showcause notices to Bombay Dyeing for alleged breach of foreign exchange regulations. In 1988, Nusli tried to subscribe to a rights issue of ACC which was rejected by chairman Nani Palkhiwala, who said it was a benami transaction. In July 1989, Nusli was denied a visa to enter India, which he countered by obtaining a stay from the Bombay High Court and, eventually, by opting for Indian citizenship. In August 1989, Nusli hit the headlines when an alleged plot to murder him was foiled.
In just over three years, he was back in the news. When NRI businessman Rajan Pillai was stripped of control of Britannia Industries Ltd, Singapore—the holding company through which he ran biscuit companies all over Asia—by a Singapore court in May 1993, Nusli jumped into the arena. Pillai and Nusli were personal friends till they fell out over the chairmanship of Britannia. Sunil Alagh, Pillai's righthand man in India, joined Nusli, who was able to snatch Britannia out of Pillai's control. Observers also feel this was Nusli at his vengeful best: in 1983, Pillai had edged Nusli out of a deal where he would have controlled Britannia.
Now Pillai retaliated by charging Nusli of clandestinely using a British passport even after he had become an Indian citizen, a charge that Nusli refuted by furnishing photocopies of his cancelled British passports. In August 1993, 70 Congress MPs signed a letter addressed to the then home minister, S.B. Chavan, demanding a probe into a host of violations allegedly committed by Nusli. These allegations against Nusli included dual passport use, links with the underworld, his role as a Pakistani spy and a clandestine link with Aneeta Ayub, a Pakistani starlet then based in Mumbai. They also claimed that Nusli had visited Dubai soon after the Mumbai bomb blasts to meet Dawood. These too were proved false.
More recently, in 1994, Nusli was in the news when he managed to pass the resolution to issue preferential shares of Bombay Dyeing to himself and his associates after three failed attempts. Following the GDR issue, the Wadia group's stake had fallen below 33 per cent. The family's resolution to issue preferential shares were rejected by the financial institutions three times in a row on grounds of low price. The final price: Rs 87.78 crore.
IN 1996—the year of liquidity crisis—Bombay Dyeing initiated a series of suits against its customer companies for non-payment. It filed a winding-up petition against JK Synthetics for recovery of its dues, a criminal case against Orkay Industries for bouncing of cheques involving payment of Rs 1.5 crore and served a notice on the Baroda-based Petrofils Ltd for recovery of Rs 12 crore. The same year, it parted ways with the Coimbatore-based Shivram Associates—after 23 years—and both filed cases against each other for recovery of dues.
The earlier months of 1997 have not been uneventful either.One of Nusli's earliest confidants who had helped him retain the company from his father, D.S. Alva, the managing director of the company, was sidelined and ignored during the current year.Alva, a reputed textile industry hand, had no option but to resign. Nusli declared: "As the company grows, it has to change, and adopt new ways." Having appointed the UK-based Warwick Group to restructure its textile operations, Nusli named John Russel—a Warwick employee—as the CEO of the company. The post of managing director at Bombay Dyeing lies vacant.
And at the recently concluded AGM, when Nusli proposed a hefty salary hike for the newly inducted members of the board—his two sons, Jeh and Ness—there was a furore among the shareholders. But Nusli was able to get his way. However, the company's earnings suffered. Last year was one of the worst: operating margins dipped from 12 per cent to mere 4 per cent.
Analysts point out that Nusli's political connections and his love for a fight have taken its toll on the bottomline of one of India's oldest companies. Industrialist friends respect Nusli for his strong opinions and his unwillingness to compromise. They also talk of his arrogance. Nusli, in turn, tries to justify his involvement in others' affairs—be it the Tatas or the Indian Express—by the trust his friends have in him.
Trust that he claims he won't let down. Nusli refused to become the managing trustee for the Express Trust, and doesn't have a single share in Indian Express. After Russi Modi, Nusli was offered the stewardship of the Tata group by JRD. When he declined, JRD asked him to look after Ratan—particularly in times of distress—when he took over. Which has perhaps led to the current controversy.
However, all his dash and flair has failed to translate into growth for his companies. The Ambanis, who started much later, today post a net profit which is greater than Bombay Dyeing's turnover. While Nusli is extremely proud of his history, it's ironic that history itself may well remember him for reasons other than his rich, aristocratic legacy.
