When Medimix management pawned gold to pay employee salaries

In 'You Turn', AV Anoop tells the success story of Medimix, the world's largest-selling Ayurvedic bath soap for over four decades.

Many were the impediments we had to face even in the face of progress. On several occasions, we had to struggle to find enough money to pay the salary to the employees. There were occasions when I waited at the bank at the end of the month to see if enough money was coming into our account. When there was a shortfall, we would call the distributors and request their help. Their co-operation has been most helpful.

I can say with a sense of pride that in the fifty years of our business history, there was no occasion when salary could not be paid. Our custom is to pay it on the fifth of every month; if that was a holiday, payment would be made on the previous day. Times when there was not enough money in hand and we had to pawn our gold to furnish it, are still fresh in my mind. If I can write this today, it is only because I was ready to see a crisis as a challenge and sought ways to surmount it. 

I have witnessed the fall of many companies that came up with a lot of fanfare during this time. What led to their untimely exit are the lack of proper planning and money for capital investment. There is also the false belief that doing business is an easy job—a belief that they gather on seeing the success of some other entrepreneurs. Most of those who venture into the world of business are unaware that it requires a lot of thought, supported by an ardent desire to succeed. Sound and ethical strategies are essential for the success of any enterprise. Many carry the false impression that if there is enough money, anyone can do business. Money is only one among the innumerable factors needed for the success of a business. 

I had the terrifying experience of having to appear in court and receive punishment for the work I was doing. That taught me the valuable lesson that ignorance of law is not an excuse. When you start a business, it is essential to be aware of the rules and regulations connected with it. This should be seen as a lesson for those who are starting new ventures. Till 1985, it was not necessary to take a licence for making soaps. But when making of soaps was also included under the law for drugs and cosmetics and once the law came into force, a licence became mandatory for making soaps. Medimix Ayurvedic Soap also came under it. 

The government had announced this in advance for the information of all those who were concerned with it. But we did not come to know of it. We had not entrusted any one with the task of bringing to our notice the rules and regulations regarding the running of the company and make necessary modifications. Those who were actually involved in the running of the company did not pay much attention to all that. So we had to pay a hefty price for it. 

Officers came to our factory for inspection and demanded to see the drug licence. As we did not possess it, they locked up the premises and sealed all the equipment, raw materials and the finished product that had been packed for distribution. 

This was a shock for me and the members of my family. It weakened us both physically and mentally. All this would not have happened if we had taken the licence which would cost just Rs 60. But it taught us an important lesson. Ignorance of a change in law was a major lapse on our own part. Making Ayurvedic soap without a licence was liable for punishment with imprisonment. This was specifically mentioned in the charge sheet submitted by the department of drugs and cosmetics in the court. The days that followed were tension-filled, with sleepless nights. Then at last, the case was taken up for consideration and the orders were passed.

The judge made a reference to the efforts of a young man to run a business with all good intentions. The punishment was for me to stand as a prisoner in the court premises till the end of proceedings for that day. The case was the last item for the day and the orders were also passed, just as the court was about to close for the day. So the rule that was to punish me, in turn, came to save me here. The judge who made matters favourable for me is nothing short of God for me. The memory of what seemed a mountain in front of me and terrified me for long but ended as a gentle pat, is still fresh in memory.

This excerpt from ‘You Turn’ by AV Anoop has been published with permission from Penguin Random House India.