S.N. Malik: An Autobiography

By S N Malik

Each human being has a story to tell, and S.N. Malik' s life journey is a captivating one! This autobiography explores his difficult education, his tenure as the chief of the Government of India' s undertakings in the Ministry of Commerce, and some of his difficult life choices that defined his character as a man. • A must-read autobiography• Learn about the risks he took and the rewards he got• Fascinating stories and anecdotes from his life• A commentary on the public service system from his family• A story that will inspire you to always fight the odds

• Language: English
• Publisher: Fingerprint Publishing
• Release date: May 20, 2023
• ISBN: 9789358563771

Book preview

Preface

main pal do pal ka shayar hoon

pal do pal meri kahani hai

pal do pal meri hasti hai

pal do pal meri jawani hai . . .

This soul-touching song was rendered beautifully by Amitabh Bachchan in the blockbuster Bollywood movie Kabhi Kabhie for his lady love played by the beautiful Rakhee Gulzar. Its deeply meaningful lyrics were written by Sahir Ludhianvi, and the song was sung by Mukesh in his deep sonorous voice. It depicts the ephemeral nature of life and all that we cherish and are proud of, be it youth, status, power, or fame. Our story is confined to a fleeting presence on the world’s stage. And yet, all of us leave behind a brief but unique story on the sands of time.

The melodious lyrics of this song completely humble me as I embark on the journey of sharing my own story in this book. It might amuse and interest the readers and splash a bit of its own colour to the mosaic of life already enriched by more eloquent and powerful voices, mighty characters that flit past through the pages of history, wiser sages, and more exalted and evolved human beings, who had the ability to sing their song in more melodious lyrics and tunes than I could ever command. I count myself amongst those about whom it can be said, ‘They also serve who stand and wait.’

With over 7.75 billion people in this world, each human being has a unique story to tell as they travel a different path. On the way, everyone develops a distinctive perspective of life. No two paths resemble each other, neither do our aims and aspirations. Everyone is served different cards by the Almighty and plays the game in their own way. Each one has a different background, faces diverse challenges, and meets them in their own unique way. At a certain level we are all the same, yet we are all unique and different.

That is why it is always interesting to read and know about how another human being tackled a problem in their peculiar circumstances like the one you were facing. How did they face similar threats, temptations, and fears like the ones you confronted? What choice did they make in these circumstances? Would you have made a different choice?

We must all deal with our issues and make use of the opportunities gifted to us. Did we win or lose by observing our value systems and the universally accepted norms or did we keep bending the rules midway to suit us?

My story is just one of those 7.75 billion stories. It might interest and amuse you and add a bit to the rich mosaic of life. It walks you through a happy and beautiful childhood; the trauma of mass scale murders and arson witnessed and experienced first-hand; the loss of every material well-being and comfort and running away from my home in just three pieces of clothing to distant and unknown lands in uncertain and treacherous times; the struggle of the family to rehabilitate and make new beginnings by fighting the odds; my education through difficult times and a career across private business enterprises and the public sector. I also share with you the beautiful world of my family. You will meet many fascinating characters along the way and read interesting stories of human interest, difficult choices made, and the risks and rewards.

The narrative about my work life accuses and blames none by name; the absent must be respected as they are not there to defend themselves. There is just one instance right in the beginning, which received wide publicity in the media, including the names of the offenders and punishment awarded to each by the court. It also alludes to some of the ills of the system and working through it.

As the chief of the Government of India’s undertakings in the Ministry of Commerce, I had a very satisfying long innings. I strove to prevent scandals in public service and did not give lame explanations and justifications later. Thus, my story justifies nothing and no one. When certain decisions were unpalatable to the powers that be, I paid the inevitable price gladly without rancour or regret, because certain principles are universally sacrosanct, and cannot and should not be sacrificed. These decisions and actions involved moral courage and rectitude, humility, tact, and diplomacy.

My story also offers the readers a peek into the way the government worked in the sixties through the nineties and how the industry worked around the system to make progress. You get a taste and aroma of the Licence Permit Raj and what it was like to get work done during such difficult times. The post-1991 generation would find it amusing and unbelievable. The contrast between then and now is razor-sharp.

I spent the first twenty-six years of my working life with India’s top private sector companies, and the next nine years as the chairman and managing director and board director of leading public sector companies. I was also a founder-director of some of the joint ventures promoted by us, including NINL, a 1.1 million tons per annum integrated pig iron and steel plant, and founder chairman of our subsidiary company in Singapore. This was followed by a nine-year stint as a senior advisor and Board Director simultaneously for private and public sector companies after my retirement, holding management and leadership seminars, and advising one of the top seven Fortune 500 multinational companies in the world. I also worked as senior advisor to the chairman of their Indian subsidiary, two leading Indian management consultancy companies, and my old employers, the Shriram Group (DCM). Thereafter, I led the life of an author.

This book captures my observations and rich experience of working with a diverse range of organisations in India and in other countries, which managers in all fields and readers in general will find gripping.

The narrative includes brief stories about members of my family who have distinguished themselves in public service and in journalism. It is replete with captivating stories and anecdotes, a few of which are a telling commentary on the system.

The ability to tell stories and form narratives is the essence of humans and this has brought homo sapiens to their present stage of supremacy over all other species on earth. No other species has the power to recount, understand, and exchange the stories we all love to listen to, read, write, and learn from. I have also shared a bit of myself through one such story.

Welcome on board.

Prologue

The Ways of The Powers That Be

Episode 1

The prime minister’s son would like to meet you. Should he come to your office, or would you like to come to the PM’s house? asked the voice on the phone.

It was an unusual call from Prime Minister Narasimha Rao’s private assistant (PA). In that fraction of a second, a thought flitted through my mind—why would a PM’s son want to meet a mere chairman of a public sector undertaking (PSU), unless he wanted a big favour for a large commercial deal? After a moment’s silence, I responded, He is too big to come to my office; and I am too small to come to the PM’s house. We will see some other time.

I suspected that he might be interested in a large contract for the import of urea fertiliser (a popular nitrogenous fertiliser), which my company imported for the Government of India. It was mere conjecture, but if it were so, I was clear in my mind that our purchases would have to follow certain prefixed norms declared in the tenders. And I was loath to relax these norms for any party or give it an undue advantage over others. In any case, this is the policy of the government and the PSUs, and all officers are expected to follow this rule, without fear or favour. And yet, I had declined to meet a powerful person.

After the call ended, I was stunned for a moment. I feared there would be consequences.

Was I worried? Yes, I was. Why did I respond on the phone the way I did? I do not know. Perhaps it was a feeling that if I had to decline a favour to a powerful person, it might be even more embarrassing to do so after meeting him. At any rate, my response was a gut reaction, which had evolved over years of experience in dealing with powerful people in the government. I felt uncomfortable with this unusual request and feared the worst. And I had declined because it seemed to me the only option and the right thing to do under the circumstances, irrespective of the consequences.

When I returned home that evening, my wife, Pratima, welcomed me with tea. She always made it a point to be ready, prim, and proper, to greet me warmly on my return from the office, no matter how busy she had been during the day.

She remarked that I was looking preoccupied. I made an excuse. But when she noticed it again over dinner, she pinned me down. I had to reveal what had transpired over the phone. I told her I was expecting an unfavourable reaction from the powers that be and was sorry for the trouble it was likely to cause her, particularly because we were not yet fully financially secure. I am glad you stuck to your principles. I will manage the house with whatever we have and if necessary, I will also sell my jewellery. But I want you to hold your head high and do the right thing, no matter what, she assured me, promptly. Such a quick and willing assurance from my wife always went a long way in strengthening my resolve to pursue the right course, not only in this but in many other instances when life presented me with similar dilemmas.

No wonder the wife is referred to as the better half of a husband!

Episode 2

I waited for the axe to fall, but it did not. However, the government did place an order for the import of 2 lakh tons of urea on National Fertilisers Limited (NFL), another public sector undertaking. This was unusual, as MMTC (where I worked) had been the sole canalising agency of the government for the import of urea for decades since its inception.

The full payment was remitted in advance by NFL to the Turkish supplier of urea, Karsan Ltd., without taking a bank guarantee/performance bond from them, something that was unthinkable for MMTC or any commercially wise organisation. As if on cue, the Turkish company did not supply the contracted material to NFL. Why would they, as they had already received the full payment! This became the infamous Rs. 133-crore (US$ 38 million) urea scam that claimed the headlines of national newspapers for a long time.

NFL’s order for 200,000 tons of urea on Karsan Ltd. of Turkey, worth about US$ 38 million, was placed on 9 January 1995, and the Central Bureau of Investigation (CBI) had registered the urea scam case on 19 May 1996. In due course, the CBI court stepped in. The Enforcement Directorate (ED) too got involved because of the violation of the Foreign Exchange Regulation Act (FERA), a deposit of the US$38 million in a Swiss bank account (Pictet bank, Geneva), and allegations of kickbacks made by Samba Rao, one of the accused in this case. He claimed that the money was distributed between the son of the Prime Minister and that of the Fertiliser Minister.

P.V. Prabhakar Rao, the youngest son of the former Prime Minister P.V. Narasimha Rao, whom I had declined to meet, and Prakash Chandra Yadav, the son of the then Fertiliser Minister, Ram Lakhan Yadav, were summoned by the CBI for interrogation in this case. Prakash Chandra Yadav appeared before the CBI.

The case, however, progressed at a snail’s speed.

Later, the court intervened, directing the ED to file a progress report in this much delayed case. In August 1998, Prabhakar Rao was arrested after a three-year chase by the ED in a surprise raid at his Mahbubnagar hideout near Hyderabad for his alleged involvement in the Rs. 133-crore urea scam. This was three years after the tenders were floated by NFL in 1995, and two years after US$ 38 million was remitted by NFL to the Turkish supplier.

However, Prabhakar Rao was let off after fourteen days in judicial custody. It was alleged that the prosecution did not provide effective evidence against him. He was under the protection of the Special Protection Group (SPG), which argued that its job was to protect the VVIP under their charge and therefore it could not reveal his whereabouts as this would violate the provisions of the Blue Book, when he was being chased by the ED at the instance of the court—a specious argument indeed.

Finally, in 2018, twenty-three years after the scam, a special CBI court convicted former Prime Minister Narasimha Rao’s nephew, Sanjeeva Rao, sentencing him to three years of rigorous imprisonment (RI) and a fine of Rs. 1 crore. Two senior executives from the Turkish company Karson Ltd., Tuncay Alankus and Cihan Karanci were convicted to six years of RI and a fine of Rs. 100 crores each. Businessman D. Mallesham Gaud was given three years RI and a fine of Rs. 5 crores.

The court sentenced C.K. Ramakrishnan, the CMD of NFL, and D.S. Kanwar, its executive director, to three years of RI and a Rs. 6 lakh-fine each. Prakash Chandra Yadav was sentenced to three years of RI and a fine of Rs. 1 crore.

It was alleged that Alankus of Karsan ‘dishonestly’ transferred the amount in various foreign banks and in the account of Karanci of Karson. The Indians accused had received the money through hawala channel.

All the above information is available in the public domain/internet. References:

https://www.hindustantimes.com

https://www.timesofindia.com

https://www.indiatoday.in

https://www.Newindianexpress.com and many other sites like those of Financial Express, Press Trust of India (PTI), etc.

The late S.S. Gill, former Secretary Shipping, Government of India, and chairman of Prasar Bharti, gave an account of this urea scandal in his book, The Pathology of Corruption, HarperCollins Publishers India, 1998, pages 115 to 118. Gill writes, It appears that the bulk of $ 4 million credited to the account of Karson’s Indian agent, Sambasive Rao, went to Prabhakar Rao. (…) Also $ 200, 000 was transferred to M/s. Rea Brothers Ltd. of New York, a front company of Prakash Yadav, son of the then fertiliser minister, Ram Lakhan Yadav. Gill further reveals, On the other hand, in a case of suspected sabotage, much of the documentary evidence got destroyed in a fire which broke out in NFL’s office (National Fertilisers Limited).

In any case, though Prabhakar Rao managed to get away lightly after being in judicial custody for a fortnight because of weak evidence before the court, Gill believed that he was the ‘kingpin of the conspiracy’. Most of the others accused were punished by the court.

Episode 3

After a while, I was told by the Department of Fertilisers that I must attend a meeting called by the Union Minister of Agriculture to review the supply and demand of urea. This was unusual. Normally, such review meetings were held in the office of either the Secretary, Fertilisers or the Joint Secretary, Fertilisers and never in the Ministry of Agriculture.

MMTC imported urea on behalf of the Department of Fertilisers; this department was our customer. However, the Department of Fertilisers itself bought urea for the Government of India. Agriculture Ministry protects the interests of the farmers and ensures adequate supply of inputs to them.

I was surprised to find that the meeting chaired by the Minister of Agriculture was attended this time by the Minister of Fertilisers, along with another junior minister, many secretaries to the Government of India, and other senior officers, including the Secretary of the Commerce Ministry, the parent ministry of my company. Yet another unusual case!

I was the only person in the dock replying to the Minister of Agriculture’s interrogation.

He started the meeting by announcing that the government needed to import 45 lakh tons of urea that year because of the approaching elections. This was much higher than India’s imports in the previous year and the quantity indicated to MMTC by the Department of Fertilisers for import during the current year. He wanted the assurance of the MMTC that it would do so. The minister said that the imports made by my company were less than the requirement.

I informed the minister that in the beginning of the year, the government had instructed us to import a much lower quantity this year as compared to the previous year. Our imports were lower in line with the directions given by the Department of Fertilisers. I explained the overall global supply and demand position and how the global urea prices had increased steeply as China had unexpectedly increased their imports to 45 lakh tons for the year. The suppliers were raising the price progressively in each of our tenders.

The position was so tight that year that global suppliers were floating the vessels of urea in the high seas without even knowing who their customer was, or the destination, and the price. We were competing with China, trying to outbuy each other such vessels of urea. The Indian ports had limited capacity to handle these vessels in the narrow timeframe indicated by the minister. Our urea vessels were already competing with our sugar vessels to get a berth at the ports. Because they could not get a berth at the ports on arrival, we were incurring heavy demurrage. And the government needed both urea and sugar desperately.

Now, if India wanted to import a quantity as high as 45 lakh tons that year instead of the 25 lakh tons indicated to us by the Department of Fertilisers earlier, it was bound to put the global market price on fire, resulting in our country paying a heavy cost and that too in foreign exchange at a time when Indian ports would not even be able to accommodate all the vessels.

So, India would end up paying much more, without getting the benefit of much higher arrivals of urea as desired by the Agriculture Minister.

The minister, however, would have none of it and insisted that we must import 45 lakh tons as they did not want the farmers to be deprived of urea during an election year. General elections were held in India in April/May 1996. I reiterated that the limited capacity of the Indian ports and the sudden upward revision of the quantity to be imported during a limited timeframe, well past the mid-year, would not allow us to import above 30 lakh tons, even if we paid higher prices in view of the prevailing situation.

The meeting ended with my promise to import about 30 lakh tons at the most and the minister demanding the import of 45 lakh tons, regardless of how much India paid for it. None of the other participants intervened, except the Commerce Secretary, who tried to explain our difficulty to the minister.

I was flummoxed at this sudden development.

Soon after, the Revenue Secretary to the Government of India, N.K. Singh, called me to say that the Finance Minister Manmohan Singh had wanted him to find out from me the correct assessment of the import of urea needed by India during 1995. I told him that India had a good carry-over stock of urea and considering domestic production and all factors of supply and demand, India might not need to import more than 30 lakh tons in 1995.

I did not enquire why he wanted my assessment. I surmised that he might be worried about the financial cost, and that too in foreign exchange, of 45 lakh tons, which was now being suddenly demanded by the Minister of Agriculture against the earlier intimation to us of much lower quantity by the Department of Fertilisers.

Besides, India faced a rising global urea market, having already touched about US$ 250 per ton compared to much cheaper purchases made by us during the previous year. These higher purchases by India and China simultaneously meant that the price would shoot up well beyond US$ 250 per ton, if the enhanced quantity of urea now indicated by the agriculture minister were to be imported.

I was feeling foxed and becoming uncomfortable at the rapid pace of these new developments. I suspected something was wrong somewhere.

Episode 4

In keeping with this rapid pace of developments, I was later summoned to a meeting in the Prime Minister’s Office (PMO). This meeting was attended by the Commerce Secretary, CMDs of MMTC, STC, Indian Potash Ltd. (IPL), and some others. It was decided that henceforth MMTC would no longer be the sole canalising agency of the government, and that STC and IPL would also import urea for it. Thus, our monopoly was broken, despite my protests. Some of the officers tried to assuage my feelings by telling me that it was good for MMTC, as blame for late supplies of urea would not fall exclusively on us and would be shared by other PSUs. It was clear that they felt helpless.

I took the hint not to press further. In any case, I too felt helpless at that moment. The buck had to stop somewhere sometime, and it had. I suspected, rightly or otherwise, that this was done to punish MMTC for not cooperating.

Looking back at these unusual developments narrated in the above episodes and joining the dots between the events, I shudder to think of the fate of the officiating CMD of NFL who was jailed in a case involving Prabhakar Rao, the son of the then Prime Minister, who had earlier tried to meet me unsuccessfully. I am still wondering why Prabhakar Rao wanted an appointment with me. Was MMTC the lucky organisation to escape the fate of NFL, and I the lucky man to escape the fate of the CMD of NFL, because I refused to play ball?

Episode 5

Soon after, a totally unconnected and disjointed event occurred. Jaipal Reddy, a Janata Party member of Parliament from Andhra Pradesh, gave a notice of call attention motion against the Ministry of Commerce/MMTC. During the discussion on this motion in Parliament, I was present in the officers’ gallery. It was alleged by Reddy that MMTC had paid exorbitant prices for importing urea during the year, and this must be because of corruption in the company. He further alleged that the CMD of MMTC, S.N. Malik, was involved.

P. Chidambaram, who had joined as Commerce Minister in his second innings only a few days earlier, in his reply, objected to naming the CMD of MMTC in Parliament, as he could not defend himself on the floor of the House. Chidambaram insisted that Reddy must withdraw his charge against me. Reddy accepted the plea of Chidambaram and withdrew the charge against me.

Chidambaram went on to say in Parliament that he had personally studied the files about the urea purchases made by MMTC over the year, and he did not find anything wrong, and that he would like to congratulate and thank MMTC for arranging the supply of urea for the country in an incredibly challenging global market. He concluded by requesting Reddy to withdraw the uncalled-for call attention motion itself. Reddy was dumbfounded at the strong defence of Chidambaram and asked how a man of his stature and standing could do so. Chidambaram replied that he was doing so after a diligent and in-depth study of the purchases made by MMTC over the entire year.

To his credit, Reddy instantly withdrew the call attention motion moved by him. It is well known that many parliament questions pertaining to public sector undertakings are motivated by interested parties; and papers are leaked out giving out-of-context information to mislead even the person who is to raise the question.

Looking at the personal slant of the question, I suspected that Reddy was misled by some interested parties. Otherwise, he could not have moved this call attention motion. Consequently, he had to face the embarrassing situation of withdrawing the call attention motion itself during the ongoing debate, because he realised his mistake, in view of the solid facts presented by Chidambaram.

Perhaps, it was sheer coincidence that both Reddy, the mover of the call attention motion, and Prabhakar Rao, the son of the then Prime Minister, belonged to Andhra Pradesh and that too to Hyderabad; perhaps, it was not. Before becoming an opposition leader, Reddy had a long innings with the Congress Party.

Such a strong defence by the minister concerned of one of his companies and its chairman and such an instant withdrawal of a call attention motion by an opposition leader is a rare phenomenon. I remain grateful to Chidambaram for diligently studying almost one hundred files before arriving at the conclusion, which he announced in parliament to clear my name and that of MMTC.

In his first innings as Commerce Minister, I was reporting to him as I was the CMD of PEC. I had been selected as the CMD of MMTC during his tenure. Shortly after this, he resigned. He, therefore, was well acquainted with my performance, conduct, and integrity. I knew I could not have got this promotion unless he was convinced. How I joined the MMTC and the reaction of Chidambaram to an uncomfortable question posed by me before joining MMTC is an interesting story. But more about this later.

Let me first share with you my personal story as this will put everything into the right perspective and context.

SECTION 1

The Early Years

CHAPTER 1

Childhood

Everybody has a childhood, and every childhood is unique.

My recorded date of birth is 5 January 1940, and I was born to Vidyawati Malhotra and Malik Jairam Das Malhotra in Sheikhupura, a town now in Pakistan, about twenty-four miles from Lahore.

How the marriage of my parents came about is an interesting story. When my mother, a