Turbulence haunts India’s high-flying tycoons

What is it with India’s airline business? Whoever touches it seems to turn, no, not into gold, but into cinder. In the 1990s we had the East West Airlines, India’s first in the private sector. It not only went under but also saw its managing director, Thakiyudeen Abdul Waheed, getting shot and killed outside his own office in Mumbai.

Subrato Roy Sahara launched his eponymous Sahara Airlines in 1993 which, like its owner, was flying high for more than a decade. Then it hit turbulence in the stock markets and was eventually devoured by a bigger fish in the form of Jet Airways.

But that was not all! Subrato Roy, who somewhat embarrassingly called himself the “Managing Worker” of his conglomerate of what he alone knows how many billions (in dollars), has been literally sweating it out in Delhi’s Tihar Jail for the past five months for his alleged sins in businesses other than airlines.

The Supreme Court, India’s highest judicial authority, has asked “Sahara Shree”, as he is known to his colleagues and hangers-on, to cough up a whopping Rs10bn ($1.6bn) if he wished to see the light of day! That is a long shot from the day when India’s biggest film star, Amitabh Bachchan, among others, had acted as the usher of guests - 11,000 in all - from across the globe to the wedding of Roy’s two sons!

Mention the word flamboyance and what immediately comes to mind is the image of Vijay Mallya who, they say, was happy to be known as India’s Richard Branson. After taking over a successful brewery business from his father and leading it to still bigger success, Mallya established his Kingfisher Airlines in 2003 with hitherto unheard-of creature-comforts for the flying public. Forget the cologne-dipped hot or cold fresh face towels and an in-flight entertainment system that could rival the best in the world. Mallya had even trained his cabin crew to spit-polish your reading glasses! A welcome drink of sweet coconut water and nibbles like roasted almonds always preceded the three-course meal and coffee.  

And then all of it sank like an aerial version of the Titanic! As the airlines’ debts soared and banks began knocking on his door, Mallya resorted to less-than parliamentary tactics. He not only did not pay his employees their wages, but also defaulted on paying the taxes that he had collected from them. The courts got into the act soon. With his planes gone, either taken away by solicitors/lessors or gathering dust in remote locations of tarmacs in various metros, Mallya today is a pale shadow of his former self.

The famed brewery, too, is under foreign control now. Yes, he is still spending millions on his favourite cricket club and the thoroughbreds, but questions are being raised on that front too. That he has so far avoided going to jail is, perhaps, more attributable to luck than anything else. Branson had once said famously: “It’s easy to become a millionaire in the airline business. You only have to start as a billionaire.”

Vijay Mallya will testify.

And now comes the news that Spicejet, the Chennai-based company owned by the Marans who are related to DMK patriarch Karunanidhi, is on the verge of defaulting payments to the taxman. The airline has collected huge sums from the employees by way of tax deducted at source, or TDS, but has not turned it over to the government yet. In the last seven years the airline has run up a combined loss of Rs2.2bn ($360mn) and it is mounting by the day. Profit and loss are only two sides of the business coin. What is worse is the threat of criminal proceedings against the Marans, airline chairman Kalanidhi Maran of Sun TV and his brother and former federal minister Dayanidhi Maran, for alleged involvement in other shady business deals. If proven guilty, the Marans could face a long term in jail.

Paramount Airways and Modiluft are two other airlines that went under relatively quickly, but their owners, thankfully, did not have other baggage to carry. Owners of India’s airlines, it seems, are out to prove the adage: The higher you fly the harder you fall.

Congress plight

Elections in a democracy are the litmus test for political parties. Acceptance of the policies and programmes of a party is directly proportional to the number of seats it wins.

In a large and populous country like India this acceptance can be state or region or even district and constituency specific. So you lose some even as you win some. While the victor goes on to assume power, the vanquished usually retreats to a corner to take stock of what went wrong and how to regroup and recoup by the time the next elections come round. It is not unusual in India to have one election or the other, at the block or district or state or national level, almost every other month. Which means the earlier you put your house in order the better.

Retreating to a corner and analysing the whys and wherefores was what the Congress Party ought to have done after its worst-ever defeat at the hands of the BJP just two months ago. But ten years of power, especially the power through the remote-control, seems to have lulled the party into such a deep slumber that it has yet to realise what hit it.

Yes, there has been the by-now usual A K Antony committee going into state-wise inquiry and such, but as with the previous Antony committee reports on elections, this one too is fast getting consigned to the trash-can of party history.

Except for a very brief statement owning up the responsibility for the defeat at an impromptu press briefing on May 16, the day of the results, both Sonia Gandhi and Rahul Gandhi have kept a studied silence on the issue. For the record, there was the offer to resign from their respective posts of president and vice-president and the orchestrated “No-Nos” from the party acolytes who, apart from other things, want to cling on to their bungalows care-of government panel memberships and party committees. They could do this only if they defend the party’s First Family and be seen to be doing so with utmost fervour.

But elections, this time to four, or even five if Delhi is to be included, state assemblies will be upon the party in less than three months. It will be a miracle if the Congress is returned to power in any of these states. Several of its long-standing allies, like the National Conference in Jammu and Kashmir and the Jharkhand Mukti Morcha (JMM) in Jharkhand, have decided to sever their ties with the Congress. The Congress, however, would have us believe that it was its decision to keep the regional parties away.

Sharad Pawar’s NCP is still making enough noises to give a feeling of well-being within their tie-up but there is no predicting the post-election scene in Maharashtra. And in Haryana the intra-party revolt is consuming one state leader after another so quickly that the party may find it difficult to put up candidates of some standing and winnability in all constituencies.

Looks like the Congress is headed the AAP way. Arvind Kejriwal’s jamboree in defence of the common man has dissipated so fast that from a party that contested 426 of the 542 seats in the parliamentary polls, it now finds itself confined just to Delhi, and that too on a sticky wicket. Will someone save India’s Grand Old Party?