International -- Cover Story
A FAMILY AFFAIR ON FIVE CONTINENTS (int'l edition)
From a spartan London office 8,000 kilometers from New Delhi, Srichand P. Hinduja has managed to command the attention of every Indian Prime Minister since Indira Gandhi.
That's hardly surprising, considering that S.P., as he's known, is chairman of the Hinduja Group of Companies Ltd. This vast family empire spans five continents and countless industries, including transport, telecommunications, and oil. The Hindujas--S.P., his brother Gopichand, and their wives and children--live on two floors of a posh building across from their offices. They give no profit figures. But The Sunday Times of London has rated them the sixth-richest family in Britain, with $1.3 billion in assets--just two places below the Duke of Westminster. Add it up, and you get one of the most powerful nonresident Indian families in the world.
DEEP CONNECTION. Under S.P.'s guiding vision, the family has become a prime mover in an international network spearheading offshore investment in India. Collectively owned and operated by four brothers and their four sons, the Hinduja group racked up revenues of $11 billion in 1994. Among other ventures, the family owns Gulf Oil International in much of the world outside the U.S. With Austrian oil company OMV, they bought the company from Chevron Corp. in 1994. Earlier this year, they bought out the Austrians. In addition, the Hindujas own the Swiss private banking group Banque Amas.
The Hinduja empire started as a trading company, founded by S.P.'s father 80 years ago in India. The family never turned its back on the motherland, either emotionally or physically. As well as remaining strict vegetarians and teetotalers and retaining a strong Hindu tradition, they have made well-timed investments that have shown a deep connection with the country. S.P.'s brother Ashok has always worked for the company in India. In 1987, long before many Western investors discovered India, the Hindujas and Fiat subsidiary IVECO bought 51% of the commercial-vehicle manufacturer now called Ashok Leyland. This investment has since tripled, to a market value of $280 million.
Now, S.P. says he wants to help other Indians share in the wealth. Last year, he created an investment group called IndusInd International Holdings Ltd., which he calls the first economic platform to help Indian investors abroad to invest in India. Although originally a network for Sindhis--Hindus hailing from the Hindujas' home region in present-day Pakistan--it is now for all Indians, says S.P.
The net worth of IndusInd Bank, the group's first venture, has increased tenfold, to $300 million. And in May, IndusInd, in partnership with the Hindujas, launched a second project--a $161 million cable network, part of a four-tier cable, satellite, software, and print-media venture that could require investment of as much as $1 billion over three years.
"POLITICAL VENDETTA." The family's prominence and secretiveness have not always attracted admirers. In 1990, the Hindujas were alleged to be tied to a scandal in which the Swedish company Bofors allegedly paid bribes to gain an arms contract in India. The allegations, which did not lead to any charges, were a result of "a political vendetta," says S.P.
With those and other allegations out of the way, the Hindujas are planning a $3 billion investment push over the next decade. By the end of that time, they expect that India will account for approximately 75% of their activities--up from 20% in 1987. Already, they are involved in constructing an entire township from the ground up in Bangalore, a power plant with Britain's National Power, and a bid to provide telephone services with Singapore Telecom. This July, they plan to announce a partner in a huge Indian carmaking venture.
Some of the Hindujas' projects, such as the telecom bid and a proposal to set up an oil refinery, have been bogged down by Indian bureaucracy for years. Despite their frustrations with the slow pace of reforms, the family is "very, very committed to India," says Sanjay G. Hinduja, vice-president and nephew of S.P. With money and power hanging in the balance, India's current Prime Minister, P.V. Narasimha Rao is, like those before him, unlikely to get too far out of earshot of the Hinduja clan.By Heidi Dawley in London