Swraj Paul was an important and influential figure of 20th Century India

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 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, had 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.

 

   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 but 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.

 

   In 1980 when, against the odds, Mrs Gandhi returned to office, she searched 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. Apparently Paul had been a vocal critic of the Emergency. Because few people knew who he was then, nobody bothered with his views. But, because he believed the Emergency would go on forever, Paul had finally 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 with which Sanjay killed himself was a gift from Paul) cosying up to the then influential coterie of RK Dhawan, Pranab Mukherjee and Zail Singh.

 

"For all his considerable achievements he remained, first and foremost, a loving and grieving father all his life."

   Nobody is clear how or when Paul had the idea of taking over Indian companies. 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 the cash that was diverted from the companies’ coffers to their own pockets. The institutions were happy to go along with this.

 

   Sometime in 1983 Paul began buying shares in Escorts and DCM, both of which were well known family-run companies but which 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 if 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 Mrs Gandhi had not been assassinated in 1984, Paul would have almost certainly succeeded in taking over the companies. But Rajiv Gandhi, who succeeded his mother, was 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 that 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.

 

   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 Labour politics. He received a life peerage and was an active member of the House of Lords till 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 felt he had been unjustly treated in the Expenses Scandal and suggested that racism had something to do with it. There were personal tragedies too 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.