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'My wife, family members as well as members of the workers will be trustees.'
'The trust will take all decisions -- no family member can individually take any decision.'
On the passing of Subrata Roy, we excerpt his most detailed interview, from Sahara: The Untold Story by Tamal Bandyopadhyay, with the author's kind permission.
Journalist-author Tamal Bandyopadhyay had interviewed Sahara group chief Subrata Roy in 2013 for his book Sahara: The Untold Story at Sahara Shahar in Lucknow.
With Roy passing away on Tuesday night, we reproduce the interview.
In the concluding part of his 2013 interview, Roy declared, "I am probably the most open person; there is no mystery in my life."
You are solid but not liquid -- cash flow is a problem for you.
Not at all. We gave Sebi Rs 5,120 crore. We purchased two hotels in the US for thousands of crores. There is no dearth of money.
We are an unlisted company. We don't need to take care of the EPS (earning per share). Why should we sell? Appreciation of land price is so huge -- maybe Sahara is the richest company in the country.
Is land your biggest asset?
No, no... The biggest asset is human asset -- it’s unmatched. The second is land asset.
What about other businesses?
Housing is doing well. Aamby Valley (a township project), Sahara Q Shop (the group's retail store) are doing very well. By end of 2013, we should be touching definitely Rs 30,000 crore plus sales in Q Shop.
We are helping the manufacturing units. We give them money, enhance the quality of infrastructure. We also procure (goods) from them. The Q Shop has a mixed model -- delivery at doorstep, plus we are opening 40,000 outlets in next 15 months. They are all 300 to 700 sq ft stalls. Now we have around 900 outlets in Delhi, Mumbai, UP, Bihar and Jharkhand.
You have 4,799 establishments. Won't you plan to consolidate?
This government never gave us the opportunity. They banned one activity after another and we had to jump from one to other... All possible options are banned in India.
We have to expand. I want to see my 10 million people living happily. We did one announcement in the company and everybody's remuneration went up by 50%. I want to do that again. (In 2002, celebrating its 25th year, the Sahara group announced a 25% to 50% hike in gross salaries for all its employees.)
What about stock market listing?
No more listing in India. Overseas, yes, but it's too early (to say). I am not in favour of listing. It's very costly -- we don't need (it). We have virtually no bank loan (on our books). We have taken bank loan only once for buying hotels overseas.
You are not a professional. Your company is run by your relatives.
I define professionalism as emotionalism. I am appointing 500 MBAs now.
I have four sons. Sushanto and Seemanto are my sons. My elder sister died early and her sons Sudeep and Samrat are also mine. They are all doing well -- one of them is always with me.
How has Sahara kept away labour trouble?
When people rise in profession, they get a fat bank balance, good life; they feel materially secure and then they change. Humans are not born bad... circumstances make them bad. We have taken an oath that nobody can share profit or asset of the company. It's in the true sense an organised cooperative.
My personal wealth -- including that of my wife, four sons and daughters -- will not be more than Rs 10 crore to Rs 12 crore in 34 years. As a promoter-chairman, I should have hundreds or thousands of crores. But I don't have even Rs 15 crore personal wealth.
I am happy and content.
I always think about my workers -- how my chaukidar (watchman) can send his son to a good school, my driver can have a good house. Primarily, I am a teacher.
My classes go for 10 hours. I must have taken some 15,000 classes. People in management talk about money motivation, but when I sit with my boys and girls I speak about self-motivation. I love them.
I spoke on this at Harvard University (in March 2011). They invited me to talk on my journey -- for three years they were after me. They heard that after Indian Railways, we have given the maximum employment and there is no trade union.
No overtime is given. It's like a family.
My pet subject is human psychology -- I have written a book on that. [Roy has written two books -- Shanti, Sukh: Santushti (Peace, Happiness: Satisfaction) and Maan, Samman: Atmasamman (Prestige, Dignity: Self-Respect).]
You were very close to Mother Teresa.
Mother used to just call me and say, send me some clothes. I used to put my boys to collecting clothes and send. She used to get so happy. Sahara Airline, on a regular basis, used to send food to her charity.
I tell you, I visited her two-three months before her death in Kolkata. She had come back from the hospital; was bedridden. She just took my hand and said, 'Hope you are sending food.' On her death bed also, she was worried about food for people.
I was the only person allowed to touch her feet after her death.
This is why Sahara is in Macedonia, birthplace of the Mother. It is a wonderful democratic country. We are going to do a huge Las Vegas kind of thing there.
We are going to develop all facilities for Bollywood and Hollywood shooting. And a dairy project. We have got around 2,000 acres of land on the lakeside at a nominal charge.
Don't you want do such projects in India?
No, because of regulations.
Will you expand overseas to de-risk your business?
No. Hotel business is not profitable, but there is capital appreciation, especially for the iconic hotels. We bought the Grosvenor House Hotel in London for $470 million. It was priced at $1.2 billion. Though we are not a company that keeps on selling things if we get big valuation, we may dilute stake (in the hotel).
You are wearing an emerald and sapphire. Do you believe in astrology?
Astrology, like astronomy, is a science, but 99% of the astrologers are not so knowledgeable. I have got two astrologers who are accurate -- one in Lucknow and another in Gorakhpur. These stones help to the extent when there is heavy rain, you should have a raincoat and umbrella. These save you from getting drenched, but can't prevent flood. They are just a superficial support, but I found in astrology mental strength.
You give financial support to Kargil war widows.
When the war was on (in 1999), one day, I was having breakfast with Amitji (Bachchan) and reading the newspaper. A sepoy at Delhi railway station was asking for a ration card for his family. Abdul Hamid's wife ran from pillar to post for a ration card.
(Hamod was a soldier in the 4th Battalion, The Grenadiers, of the Indian Army, who died in the Khem Karan sector during the India-Pakistan war of 1965, and was the posthumous recipient of India's highest military decoration, the Param Vir Chakra. His wife Rasoolan Bibi received the award.)I instantly decided to support them.
Till now, every responsibility is ours. We give them double the salary of the person who died and take care of their children's education. They rejected all other offers and accepted only the Sahara help.
You are a patriot.
We started Bharat Parva -- we have glamorised Bharat Ma. I love my country. I can die for my country.
What is love?
Love is giving. I do not believe in saying 'I love chicken'.
How's life beyond work?
Family, people around me.
We go to London when I am free, for pleasure with work. I have never stayed in my London hotel. I prefer to stay at the guesthouse. When we are free, we say, let's dance. There are good singers in the group.
At times, I sit with my friends. I don't get much chance though. There are so many social obligations. I feel like doing other things, but where is the time?
Everything is fine with me, the only problem is time. I am very happy and content.
At times, for 72 hours, I don't touch my bed.
I am just like any other human being. I follow the teachings of my father. I was an active NCC (National Cadet Corps) cadet. I even wanted to join the military. I have learnt a lot of things from these.
I repeat again, everyone is curious about your source of money? Where does it come from?
Sahara India Pariwar commenced its business activities in 1978 and diversified into various businesses like infrastructure and housing, electronic and print media, para-banking, mutual funds, life insurance, hotels, hospitals, sports academy, tourism, dairy products, etc.
The group's activities started with para-banking activities and Sahara India Financial Corp. got registration with the Reserve Bank of India as an RNBC. The company was primarily into accepting deposits from public and making investments as per the RBI directions.
Prior to 2004, 80% of the deposits mobilised, including interest, was to be invested in directed securities and the balance 20% or five times of net owned fund as per the discretion of the board.
However, from 2004 onwards, the RBI prohibited discretionary investments and the company has had to invest the entire amount in directed securities only.
Sahara India Financial Corp. had invested in certain properties, including hotel Sahara Star, under discretionary investment category, which over the period had seen meteoric rise.
Apart from this, the group through private placement basis had mobilised resources specifically for making investments into the realty sector and several township and commercial projects were created out of the resources. The penetration in the realty sector was further enriched by availing loan and equity contribution from the market.
The group has also taken bank loans for funding of several good projects which have resulted in generation of revenue leading to internal accruals like Sahara Estates Lucknow, Sahara Estates Gorakhpur, Sahara Ganj Mall, etc.
You are a hugely successful entrepreneur. How will entrepreneurship flourish in India?
It's fairly simple. There is nothing hi tech about entrepreneurship. I believe in team work. I use my time and energy for the development of the team. I teach them, guide them, help them and give them all kind of support. For any successful venture, there has to be a leader and a team -- they complement each other.
There is another important thing, particularly for financial intermediaries -- we took an oath that nobody would take any profit or asset of the company. That's true about my family members also. That has worked well.
The third thing is the chief of any organisation should be a guide, a teacher and a guardian. Till my last breath, I am a guardian for them in the true sense of it. I don't believe in bossism.
What's your message for entrepreneurs in India?
A person can be very successful adhering to rules, regulations, values and ethics, provided in his nature he is happy and contented. Ambition is the biggest enemy in life. I am always contented with whatever God has given me.
The situation is not conducive now because an entrepreneur needs to have funds.
However promising an entrepreneur is, he has no way to raise funds. If you go to bank for Rs 2 crore, you need to have Rs 60 lakh as margin. You cannot enter share market of the debt market.
You cannot raise money from public as all possible options are banned in India. In 1978, the Prize Chit and Money Circulation Scheme was banned; next we saw unincorporated bodies like partnership firms being banned from taking public money; then mutual benefit scheme was banned; after that housing finance and leasing companies' ability to raise money was curbed; RNBC was banned; and now OFCD is banned from private placement for unlisted companies. How does one raise money?
If I were to start now with Rs 2 lakh -- equivalent to Rs 2,000 in 1978 -- I would not be able to cross Rs 10 crore turnover in my life. We had faced six bans for raising money. The regulator should regulate and not become an agency to ban business.
After Subrata Roy who? What's your succession plan?
Good question. I am very clear about it. We are in the process of setting up a trust which will own all shareholdings. My wife, family members as well as members of the workers will be trustees. Five or six officers also will be there.
The trust will take all decisions -- no family member can individually take any decision.
Any timeframe for setting up the trust?
I don't think I will die so fast. We are in the process.
Where do we see Sahara ten years down the line?
Forget ten years, if we cannot do what we want to do in next five years, we are clearly incompetent. Since we are not listed, you cannot judge us on market cap.
In next five years, in terms of assets and profits, Sahara will be among top ten companies in the world.
You are an enigma; you are mysterious and controversial.
It is very unfortunate if anybody thinks like that. I am probably the most open person; there is no mystery in my life. It's very easy to pass on any statement on anybody. I am not controversial.
It's a first generation organisation; it has grown big and we are high profile. The conglomerated is unlisted and so people imagine things.
How do you describe yourself?
You've to tell me that.