The death of Swraj Paul on 21 August in London has gone largely unnoticed in India. This is a shame because Paul was, in the later years of the last century, the most influential overseas Indian—what we now call an NRI or PIO—in the world, straddling both Indian and British politics with equal felicity.
Most people first heard of Paul in 1977. Indira Gandhi had just lost the general election, been thrown out by the voters of Rae Bareilly and was the subject of several inquiries and criminal investigations. The consensus was that she was finished.
In the midst of all this gloom, Swraj Paul suddenly emerged in the lives of the Gandhis. He was a member of Kolkata’s wealthy but obsessively low-profile Paul family, owners of the Apeejay group, but had made a new fortune in England, investing in steel and manufacturing in the Midlands. And no, he was not low-profile.
Also Read: CEC Gyanesh Kumar isn’t interested in convincing the people of India
Grief and Gandhis
The defining event of Paul’s life was his daughter Ambika’s battle with leukaemia. In 1966, when foreign exchange was scarce and Indians needed to apply for what was called a P Form from the government to be allowed to travel abroad, Paul was told by doctors that the best hope for Ambika lay in treatment in London.
Searching for a way to circumvent the red tape this would necessitate, Paul wrote directly to Indira Gandhi, who had just taken over as Prime Minister. He did not know her but wrote as an anguished parent. Not only did Mrs Gandhi respond, she facilitated the Paul family’s travel. Unfortunately, Ambika died in London and Paul went into a depressive spiral for a year. When he finally recovered from that phase, he set up Caparo, his steel company, and turned it into a success: unusual in the 1960s, when there were very few Indian millionaires in the UK.
Paul would later say that he met Mrs Gandhi during her glory days without developing any sort of close relationship with her. But in 1977, when she was down and out, he became her biggest cheerleader. Mrs Gandhi had helped him at a low point in his life, he said. It was now his duty to do the same for her.
There were stories about how he donated to Mrs Gandhi’s faction of the Congress when nobody else would, but these are hard to substantiate. What is well documented, however, is that he invited Mrs Gandhi to London and treated her like visiting royalty. Mrs Gandhi faced a hostile reception from the UK press, but Paul’s loyalty was unswerving.
Loyalist to insider
In 1980, when, against the odds, Mrs Gandhi returned to office, she looked for ways to repay his loyalty. Paul was grateful but said he could not return to India. Mrs Gandhi then offered him the post of High Commissioner of India in London.
This led to some awkwardness. Paul had been a vocal critic of the Emergency. Because few people knew who he was then, nobody paid much attention to his views. But, convinced the Emergency would go on forever, Paul had surrendered his Indian citizenship and got himself a British passport. So there was no way he could represent India diplomatically.
Mrs Gandhi seems not to have minded. More surprisingly, neither did Sanjay, her errant son. Paul became a non-resident member of the Gandhi establishment (the Pitts stunt plane that Sanjay fatally crashed was a gift from Paul), cosying up to the then influential coterie of RK Dhawan, Pranab Mukherjee, and Zail Singh.
Nobody is clear how or when Paul had the idea of taking over Indian companies.
Also Read: How an NRI’s attempt to take over 2 Indian firms led to LIC turning invincible
Paul vs India Inc
In the 1980s, Indian industry was a cosy club of a few businessmen whose fortunes were protected by import tariffs, and bureaucratic barriers to entry that kept competition out. This was well known, but Paul discovered something that was still unknown to the general public.
Many (if not most) Indian companies were really owned by public financial institutions. The so-called promoters owned only a tiny proportion of the shares, often less than ten percent. And yet they treated the companies like private empires, and many helped themselves to cash diverted from the companies’ coffers into their own pockets. The institutions were happy to go along with this.
Sometime in 1983 Paul began buying shares in Escorts and DCM, both well-known family-run companies that were overwhelmingly owned by public financial institutions. At first, he said the purchases were only for investment purposes, but a little later he went public with his criticisms of both companies. In each case, he said, a family claimed to be owners and ran the company badly. In fact, he said, the management was so incompetent that he doubted either company could survive profitably into the 21st century. When they failed, he added, public money would be lost because of the so-called owners.
Obviously, the ‘so-called owners’ were not pleased and refused to register his shares. The matter went to the courts and when Paul realised that most Indian industrialists, and much of the press, had ganged up against him, he took his case on the road, going from city to city to complain about the state of Indian industry.
If Indira Gandhi had not been assassinated in 1984, Paul would almost certainly have succeeded in taking over the companies. But Rajiv Gandhi, who succeeded his mother, was at first less supportive, and then openly hostile. Paul’s initiative failed.
And yet, though he lost the battle, he won the war. The public became aware of the true nature of business ownership, and financial institutions began at last to try to function as effective custodians of public wealth. Many of the ills Paul pointed out have now been cured. And he was probably right about what fate had in store for his target companies if the management was not changed.
Father first, Lord and tycoon later
Paul remained a friend of the Gandhis but the closeness gradually disappeared. He said later that he was disillusioned with Indian governments and focused his attention on UK politics. He had always been involved with the Labour Party and, after his India plans had soured, he threw himself into it. He received a life peerage and was an active member of the House of Lords until he was forced out of that chamber, one of the many victims of the UK’s expenses scandal.
Though he lived to be 94, his best years were long behind him by the end. He said he had been unjustly treated in the expenses scandal and that racism had something to do with it. There were personal tragedies too, like the death of his son in 2015, and he ceased to be the cheerful, ebullient, charismatic person he had been in his prime.
But nobody can deny what an important and influential figure he was in 20th-century India. He played an important, perhaps crucial, role in Indira Gandhi’s comeback. His takeover attempts and his criticism of the cosy little club that was Indian business presaged the changes that would come with the 1991 reforms. He was the first person to make Indian politicians aware of the power of the Indian diaspora, and successfully lobbied for policies that connected overseas Indians to their mother country.
Despite the portrait painted of him by the Indian media when he was trying to take over Escorts and DCM, he never came across as cunning or two-faced. He was thoroughly Punjabi (the Pauls are from Jalandhar), and proud of it.
In the 1980s, when he was asked why he was so loud in his criticisms of Indian industry when his purpose could be better served by a quieter, shrewder approach, he responded, “because I am a Punjabi, not a Marwari”.
Throughout his life he spoke his mind and never hid his emotions. Till the end, any conversation about Ambika would cause him to tearfully break down. For all his considerable achievements, he remained, first and foremost, a loving and grieving father all his life.
Vir Sanghvi is a print and television journalist, and talk show host. He tweets @virsanghvi. Views are personal.
(Edited by Asavari Singh)