बाप का राज: Of Sons and Sons-in-Law

Dynastic rule is not new in India. In almost every field of life, it is the default way of functioning. To follow in your father’s footsteps is seen as a matter of pride and families in India boast about it.

In politics, it is not just the default, but even if it does not happen by default it is forced by others. So you have the famous Nehru-Gandhi family, where it seemed like Sonia and Son were finally breaking the chain and getting out of the picture in 1991, but are now right in the saddle back again. There is no dearth of examples and it cuts across parties. So you have the Pawar clan in NCP, the Yadav clan in SP, Karunanidhi clan in DMK, and so on and so forth.

Then there are many minor clans like Bansal clan, Yeddyurappa clan, Mayawati and family and whoever else. It basically is all pervading. Any ABC who gets the opportunity to convert his or her position in their allocated fiefdom into ABC and Sons will do it.

14678-256-k13bc7572And dynasty is not just sons anymore. It can include daughers, nephews and other family members depending on how big it gets. And off late, it has also started including sons-in-law! Aah – son-in-law!

The Son-in-law always had an exalted status in Indian families. He was to be treated with utmost care and respect, and tolerated irrespective of how he is or what he does, but was always the outsider. But now he is slowly becoming family.

Actually, that makes it convenient to expand business in new ways, and disown it if caught – after all, it is the son-in-law, and not the son! Anyway, be that as it may. The point is dynastic rule is default in politics, and includes extended family (and sons-in-law also!) lately. So we expect that from our politicians.

In films, it is normal for stars (or producers or directors) to ‘launch’ their sons irrespective of whatever talent they may have. So it is quite customary that Raj Kapoor launches his sons, and his sons launch their sons (and daughters) and get them into films. So Abhishek gets into films after Amitabh, Hrithik gets launched by Rakesh, or the Deols (so many of them) get into films largely due to Dharmendra, and even Aamir in some way had his uncle.

For those who forgot, even Rajendra Kumar launched his son Kumar Gaurav, Dev Anand launched his son Sunil Anand, and Raj Kumar launched his son Puru!! If acting does not work, there’s always something else.

Well, some of the ‘launched’ sons may have become stars in their own right later, but they got there in the first place due to their surname and their genes. Not their fault, but that’s a fact.

In some fields it is a bit tough. Like in sports. You can’t push a Rohan Gavaskar simply because he is Sunil Gavaskar’s son. That’s because in sports, performance is clear. You do well or you don’t. You can’t dilly dally. No amount of ‘dadagiri’ like in politics, or ‘makeup’ like in films will help in sport. Even if you have the surname and the genes, बाप का राज is tough.

Though in sports administration, it is different. You can get your son or son-in-law to manage something, and thrive even if they mess up :-). But then, that’s not sport, that’s business.

By the way, as an aside, sons-in-law did not always have such a bad name.

While appreciating the qualities of Tom Murphy and Dan Burke (who ran Capital Cities – one of Berkshire’s long term holdings), Warren Buffett had said “Tom Burke and Dan Burke are not only great managers. They are precisely the sort of fellows you would want your daughter to marry.”

But then, such managers (or sons-in-law) seem rare in recent times, specially in business.

In business, dynastic rule was the default till probably 10-15 years back. It still is the major way of life, but our companies have a good PR machine to show as if it is not. Most educated observers can see through this PR machine.

So you have Mukesh following Dhirubhai Ambani, Kumarmangalam following Aditya Birla, Anand following Keshub Mahindra, Rajiv following Rahul Bajaj and even Ratan Tata ‘selecting’ Cyrus Mistry – who though not a son and not a Tata, is clearly from another Parsi shareholder family, and not remotely a professional outsider.

It is a different matter that some of them may have done a decent job in ‘creating shareholder value’ but that doesn’t negate the fact that they got there in the first place because of the surname and the genes. Not their fault, but that’s the fact.

In this scenario, some Indian companies were different. One can name them on their fingertips. I could hazard naming some of them. The HDFC group, L&T, perhaps Asian Paints, maybe Bharti though I am not sure, perhaps some other pharma, IT or consumer goods companies.

Among all of these, Infosys was at the forefront, the torchbearer. The company that was built in an era of promoter-family businesses, but one that staunchly announced that none of the promoters will have any family in the company.

That’s the reason I am not sure how to react to Murthy returning to Infosys, and on top of that, getting his son as his executive assistant.

I am not sure whether to be happy that Murthy is back, or to be disappointed that he had to come back, after all. Also, I am not sure Rohan Murthy can claim to be the best executive assistant in the world. Many inside or outside the company would be willing to work for the senior Murthy for less than Re.1, more so if they get a few shares.

In all fairnes, it is possible that desperate times need desperate measures, and so the father-son duo will just do the job and go away.

But beyond that, I truly hope that it is not the start of ‘बाप का राज’ in a company that claimed to put India on the global map. Because then that would mean that ‘बाप का राज’ works in the company that provided the hope to millions of Indians that you don’t need a बाप to become truly successful.

Tragedy in Close-up, Comedy in Long-shot: A Matter of Perspective

infycrash“Is Infosys closing down?” asked my friend Swami as we met for our weekend coffee today.

I had heard of nothing like that, and so obviously was all ears to him. Not sure why he asked, even my broker friend Jigneshbhai said, “What nonsense? Where did you hear that?”

“No – looking at the extreme reaction to its results yesterday, it looked like everyone was selling their stock as if the company was going to either go bankrupt or close down. So I thought I will check with you, as you guys are knowledgeable about such things. Does it have a lot of unpaid debt?” explained Swami.

Jigneshbhai was ready to answer this one as I wasn’t quite so sure. “No debt. They never had any. And I don’t think they ever will take any.”

“So are they making losses? Or do they have some liabilities from customers? Or they are not getting business from customers? What’s the problem?” asked Swami, not quite sure why people were selling the stock.

“No losses. Their profit margins are almost 30%. They grew by 22% last year” the well read Jigneshbhai explained.

“So then what’s the problem?”

“Well, they did not meet profit expectations that they had promised” said Jigneshbhai. “They had promised an earning of Rs.147 and they earned some Rs.145.5 per share. And they said next year may not be great. Every one expected them to grow by 12-14%, they said it would only be 10% max. So they did not meet expectations of investors.”

“Hmm..Got it now. So they are not performing? Should I also sell it now?” Swami questioned.

“Well, I don’t know. That depends on you and what your perspective is” said Jigneshbhai, in a cryptic manner.

“I don’t understand. Why do you have to talk in riddles all the time? Tell me clearly, yes or no” demanded Swami, clueless about what perspective means.

“I cannot tell you that. I wish I had simple answers. You decide for yourself. I told you it is a matter of perspective” continued Jigneshbhai, still not ready to solve Swami’s quandary.

There was a silence for a while. I thought Swami had given up on Jigneshbhai, and vice versa.

charliechaplinBut then, my broker friend suddenly got up and said, “Charlie Chaplin had said once that life is a tragedy when seen in close-up, but a comedy in long shot. I don’t know the answer to your question. But if you think about markets like that, perhaps, you may get an answer. Specially when such so-called tragedies occur. After all, what you see is a matter of perspective.”

Leaving us perplexed, Jigneshbhai finished his coffee and walked away.

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