The world’s newsrooms are engrossed in exposing private text messages, emails and deposition transcripts showing Fox News’ top brass cherry-pick quotes to generate ‘suitable’ headlines. This scandal proves that one can either do solid business or produce solid news – mixing the two is always inflammable and sometimes even suicidal. The story of Indian tycoon Ram Krishna Dalmia is a classic example.
The beginning of a tumultuous news career
At one point in the 1930s, when Dalmia was one of the biggest industrialists in India – an alpha performer in sugar, cement, chemicals, glass, banking, milk and dairy – he acquired a taste for dabbling in politics and befriended several politicians from the Indian National Congress. He donated generously toward Congress’ campaigns, dharnas and morchas against British rule. As he spent more and more time in the company of the leading lights of that time – MK Gandhi, Subhash Chandra Bose, Rajendra Prasad, Sardar Patel, Jawaharlal Nehru, Mohammad Ali Jinnah and others – he began to form strong political opinions. With the acquisition of Bennett Coleman’s Times of India newspaper, which, till that time, was a blue-blooded English publication run from Bombay under the stewardship of a British editor, Dalmia found a forum to air his opinions on a national platform.
As the battered and shaken post-World War Britain hurtled toward a hurried exit from an increasingly defiant India, everyone in the political arena had a different vision for an ideal post-independence nation. In this charged atmosphere, Dalmia developed a close friendship with his immediate neighbour Mohammad Ali Jinnah. He held frequent brainstorming sessions on all that could possibly be done to patch up the increasing chasm between Jinnah and Nehru. “With generous support from Mahatma Gandhi – RKD tried to open parallel channels of conversation between the two feuding sides, but their intense rivalry was akin to a visceral sibling war,” says Neelima Adhar, Dalmia’s daughter and author of his biography, Father Dearest.
Soon, the country was pushed into a blood-soaked Partition. Lakhs of bewildered and forlorn refugees poured into India from both sides, and the newly elected Prime Minister, Jawaharlal Nehru, found himself on Dalmia’s radar, firing at him from the Times of India editorial cockpit. Nehru would seethe and simmer at Dalmia’s advances, but TOI headlines continued to scream at his government’s lapses and shortcomings. In a fit of rage, Nehru once said to a reporter: “He [Dalmia] is an ugly man with an ugly face and an ugly mind and an ugly heart …just because he owns a few newspapers, he claims to be an expert on foreign affairs?”
Meanwhile, in 1955, Feroze Gandhi, a Member of Parliament from Rae Bareili and also the Prime Minister’s son–in–law was keen to underline his independent political credentials. He raised the issue of misuse of public funds from life insurance companies to purchase TOI. Nehru saw this as an apt opportunity not only to rebut Feroze Gandhi’s accusations but to also lasso Dalmia. He promptly appointed a Commission of Enquiry to look into the case. Based on its report, Dalmia – one of the world’s richest men then, was sentenced to two years in Delhi’s Tihar jail for embezzlement of $422,000 worth of securities.
“As a stop-gap arrangement to raise funds towards government penalties, RK Dalmia mortgaged his two pet companies – the Times of India newspaper and the Sawai Madhopur Cement, which was a money churner to his protegee and son-in-law Shanti Prasad Jain, with an understanding that these would be returned when he had the money to buy them back. It was a double whammy because he never got these two companies back, and the entire RKD downfall began from here. He never recovered from the betrayal. In my view, his entanglement in the news business was a costly error,” says his daughter, Neelima.
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An unlikely fall
It was an unlikely fall for a self-created and self-taught business mogul. Born on 7 April 1893 in Chirawa in Rajasthan, the Dalmia family tree was respected for the tremendous philanthropic tradition set by Seth Kashi Ram Dalmia, RK Dalmia’s great-grandfather. But the actual financial fortunes of the family had whittled down to the extent that they had to migrate to Calcutta and live in a small rented quarter near the Hooghly River to attain basic subsistence. Dalmia and his father Harjimal worked as salaried employees at other Marwari establishments but were forever dreaming of setting up their own businesses.
In a hurry to start and raise funds, a young Dalmia began dabbling in the satta (betting) market. While this did not lead to any windfall, it became a lifelong addiction and a cause for many business troubles in his later life because he often lost a lot of money in impulsive bets. With a series of reversals and debts, Dalmia acquired his second affliction– that of consulting soothsayers and fortune-tellers and making business decisions based on their predictions. Throughout his 70-year-long entrepreneurial career, Dalmia suffered many losses due to this irrational belief in almanacs and palm reading. This may have been because his first break and big profit accidentally happened due to a pandit’s prediction.
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A believer in miracles
During one of his low phases, Dalmia consulted a pandit from his neighbourhood temple, who predicted that the former would soon make a lot of money in silver trading. Accordingly, Dalmia made enquiries in the London Stock Exchange and placed a big bet on silver bullion. Miraculously, the price of silver increased, and he ended up with his first big profit – large enough for him to make extensive investments in the sugar business. One thing led to another, and soon, Dalmia became the biggest sugar baron in South Bihar, his series of mills stretching all across the sugar belt. Promptly re-investing his profits, he went on a buying spree. He acquired the Bharat Insurance Company in 1936, which declared a turnover of Rs 25 crore within the first 12 months of its takeover.
With money gushing in, Dalmia put his hand into several businesses, such as paper pulp units, cement factories, cotton processing industries, wool factories, glass units, and banking companies. He even started the first private light railways, the first private ropeways to transport raw sugarcane to factories and the first private trunk call and telephone line from Bihar’s Dalmianagar to Bengal’s Calcutta. Big or small did not matter—Dalmia invested wherever he could. For instance, he started the first hand-operated bioscopes, as also the first passenger lorry service in the remote villages of his home state of Rajasthan. At one time, the Dalmia empire stretched across India and was second only to Tata and Birla.
But at the epicentre of this rotating financial hurricane was a man full of contradictions. He was one part bold and astute, yet also full of frailties leading to a turbulent personal life. With 18 heirs from six wives wrestling for his fortune, it was difficult for the combusting Dalmia meteorite to leave a solid legacy for posterity.
This article is a part of a series called BusinessHistories exploring iconic businesses in India that have endured tough times and changing markets. Read all articles here.
(Edited by Zoya Bhatti)