Here's why Mallya flopped: He used corporate strategies in politics, in business he used political ploys - Firstpost

Here's why Mallya flopped: He used corporate strategies in politics, in business he used political ploys

By Srinivasa Prasad

The first lunch I had with Vijay Mallya was a memorable one and not just because it lasted four and a half hours. And certainly not because the amount of UB beer and McDowell whiskey that he downed would have laid up one of his thoroughbred horses for two days. "I drink only my own brands," he said.

I remember it because of the unmistakable fire, the driving ambition and the true zeal that I saw in the eyes of a young tycoon. It was 1986 and he was 31. And it was three years since he had taken over as Chairman of the United Breweries following his father Vittal Mallya’s death at 59.

There were two things he harped on over that lunch. One was that he had inherited a Rs 300-crore company from his father and he would soon turn it into a Rs 3,000-crore empire. Those were the amounts he mentioned. The second was that he would pull it off by diversifying into areas other than liquor. It seemed to me that what he would have liked to say, but what he didn’t, was that he wanted to be a man of his own making. He didn’t want history to remember him as a father’s son.

“Liquor doesn’t have too much future,” he said, between gulps of it. “You can’t even advertise it in India.” That was what made him look elsewhere to diversify.

I must confess that I was truly impressed, and I believed he would do as he promised. But that was 30 years ago.

Vijay Mallya.

Vijay Mallya. Image courtesy: Agencies

The lunch came a couple of weeks after his arrest and release on bail by the Enforcement Directorate (ED) for alleged FERA violations, and after he screamed at me outside the ED office. When he saw me talking to his wife Sameera, who was in tears, he shouted: “You made my wife cry.” I explained that I had been waiting outside the office for five hours to get his version of the FERA case, that his wife had arrived only a few minutes earlier and she had broken down after I asked her a few questions and that I was only doing my job as a reporter. Then he softened up and almost apologised. The man was forgiving after all!

Vijay Mallya became a young tycoon like his father had. It was in 1947, when he was only 22, that Vittal Mallya had become the Chairman of UB, a company that a Scotsman had founded in 1915, and five years later, acquired McDowell. The son shared the father’s penchant for acquisitions, but nothing else.

Besides beer and liquor, his father’s empire had included squashes, jams, chocolates, lime cordial, sewing machines and pharmaceuticals. The son jumped headlong into high-tech and core sectors: telecommunications, medical electronics, engineering, fertilisers, oil drilling, aviation services and bio-technology. He even bought into two provincial dailies in the US and two publications in India: Asian Age and Cine Blitz. Later he had to sell some of the new ventures. Some lost money, floundered or folded up.

Mallya met with failure after failure but, as even his worst critics would agree, he had “nerves of steel” ­ one of his favourite phrases.

It came as a surprise to me that Mallya let his executives barge into his study at the sprawling Brewery House that his father had built in Bangalore. Many of them would call Mallya by first name. And many would disagree with whatever he said, be it an appointment he needed to make or a medicine he needed to take or things he needed to do at the UB Headquarters, a stone’s throw away. He intensely cares for his first wife Sameera, a former Air India air hostess, whom he divorced after the birth of a son, and current wife Rekha, who gave him two daughters. Twice married earlier, Rekha has two children of her own. Mallya cares for all of them.

It mattered to him little that he was called Hugh Hefner of the East or a “king of good times”. He always said he only did openly what others did secretly.

The only thing that seemed to matter to him was raw ambition. In what proportion the “good things of life” and this ambition filled his mind is debatable, but there was ambition, of course, and it was strong and overpowering; an ambition that even overlooked simple business sense and brought down his empire, as it turned out in later years.

When blind ambition is accompanied by impulsive actions, too much of confidence in himself, too little of it in others around him and extravagant spending, businesses are guaranteed to flop. Reckless spending and “borrow-first-and-worry latter” ­ as some critic put it ­ were the hallmarks of his style from the start. I remember an ICICI Bank manager telling me a long time ago that his staff had a tough time recovering the credit card dues of Mallya.

Besides, he seemed to believe that money could get anything if you spent it in the right place and in right amounts. I was aghast once when he boasted during cocktails at the end of a press conference: “I can buy any journalist in India.”

The late 1990s metamorphosed Mallya, his ambition soaring to new heights. It was then that he decided on two ventures: launch himself into politics and launch a world-class airline. In the end, he flopped in both. In politics, he used corporate strategies. With the airline, he not only used political ploys, he even made it a fine example of how not to do business.

He told his close friends that one way to fight corporate cases and expand business empires was to acquire political power. It was then that he discovered that his title of “liquor baron” a liability. Such a prefix to his name is not likely to find favour with either the media or the voters, especially in Karnataka, where the liquor lobby is known to pay devious games to install and topple governments.
Mallya, of course, didn’t tell me all that, but what he did tell me, during his late-night calls (past 2 am) from the US (afternoon there) was that it hurt him to be called a “liquor baron”. Liquor, he explained, was only a tiny part of his business now with many other things thrown in. I didn’t see much point in arguing, especially since the incoming overseas calls were adding to my mobile bills in those days of high mobile tariffs.

Mallya, no doubt, had visions of becoming Karnataka’s Chief Minister by winning the 2004 state assembly elections for his Janata Party. But he found it the hard way that election victories needed more than the boardroom manoeuvres of corporate coups.

For campaigning, he extensively used his private jet, a helicopter and a Mercedes Benz. People turned up at his meetings more to see the rich man who was known to surround himself with pretty women in skimpy bikinis. To their horror, only well-dressed UB executives accompanied him to political rallies.

He fielded 155 candidates for the 224-strong assembly. He thought the sword of Tipu Sultan that he had acquired for Rs 1.6 core at a UK auction would get him the Muslim votes, but that was where his election arithmetic seemed to begin and end. He seemed pretty confident, when he spoke of a victory, the same way he would speak of corporate acquisitions and mergers. Money indeed flowed like beer from his breweries, but he didn’t win a single seat. He later blamed his defeat on people in his own party who had “selfish interests”.

Mallya entered the Rajya Sabha in 2002 with support from Deve Gowda’s Janata Dal (Secuar) and the Congress. He got a second term in 2010 with support from JD(S) and BJP.

All the parties are now trying to distance themselves from him. Politically, Mallya is closer to the Janata and Sangh parivars. The Congress now is accusing the Modi government of having let Mallya escape. But who let him commit the alleged crimes? Both the BJP and the Congress showered munificence on Mallya. In politics and business, munificence is not a one-way thing.

When Kingfisher Airlines was on the drawing board, requiring permissions, licenses and sanctions, Atal Bihari Vajpayee was the Prime Minister, and there were four civil aviation ministers: Ananth Kumar, Sharad Yadav, Shahnawaj Hussain and Rajiv Pratap Rudy. During the period from 2005 when the airline took off till 2013 when it went bust, the government and the banks were soft on Mallya, and it was the Congress-led UPA which was in power then. The civil aviation ministers of that period were: Praful Patel, Vayalar Ravi and Ajit singh.

In the middle of all this mess, there is only thing that you can be reasonably sure of. Mallya is not just about to take the next available flight to come back home.

The author is a senior journalist. He has covered the southern states extensively, and was part of the team that re-launched the Bengaluru edition of the Times of India in 1995.

Comment using Disqus

Show Comments