‘It’s not a personal ambition to be sitting on people’s boards and pretending to be bosses’

Good deal for both of you. But not many Indian entrepreneurs will do that because people say,oh my father built this company,my grandfather built this company. That’s what makes it different.
Shivinder: Well,I think we have certainly challenged the status quo in terms of logic and format. I think being from the next generation,also our training and background,what our father taught us,we’ve learnt to look at things much more rationally. So we do try and keep emotions out because at the end of the day,emotions really spoil the pie in a very significant manner. Especially in taking business calls.

How do emotions spoil business?
Shivinder: If you look at it from a family perspective,the perspective of friendship,ego really comes into play. This is mine,this is yours,I want more,I want less. I think if you start looking at the issue rather than the individual,you’re able to come,more often than not,with a rational outcome.

It was the smartest thing both of you did,with Ranbaxy.
Malvinder: You know,it was at that point in time the right decision for the company,because the industry was rapidly changing,and I think strategically,it made sense for generics and innovation to come together. I think the signals at a global level were clearly heading in that direction. We saw it,we understood it and we took that call,and then we began to focus on our existing business.

How tough was it? Because I’m sure there were pressures from your peer group,from the market in general,the chatterati and also the family?
Malvinder: I’ve actually experienced and realised that some of the most difficult decisions are actually the simplest decisions to take. Many a times,we get too lost in some of the micro and smaller decisions,we tend to debate too much.

…what Americans call Analysis Paralysis.
Malvinder: I think the bigger decisions are clear. It is the writing on the wall,and when you see it objectively,and when you put the company first,you remove yourself as an individual or personal aspects linked to that,and you look at it clinically,that’s the best way of taking those calls and that’s exactly what we did. There was no hesitation,it was the right call,I would do the same thing today if I had to.

But what were the pressures?
Malvinder: There was no pressure.

From family,from media,from market,from CII,from your friends at CII,older friends at CII?
Malvinder: If you look at it,this was probably India’s best kept corporate secret: till the day it got announced,nobody knew about it. Even from a family viewpoint,both of us went and told the family a day-and-a-half before we were to announce it. So there was surprise. But at the end of the day,they left the decision to the two of us.

Would your father have taken the same decision?
Malvinder: I don’t know but given where the markets are and where the business is,I think that was the best call to take for the company. Today the company,with generics and innovation linked together,is a right combination to have for the next many,many years,for the industry and for the business.

But you’ve exited fully.
Malvinder: Totally.

That’s what makes the two of you interesting because when people exit,they usually keep 5 per cent,3 per cent,and say keep my father’s portrait there,keep my grandfather’s portrait there,and have one of us as non-executive chairman.
Malvinder: Daiichi Sankyo was extremely good and they said,‘Look,you know,it’s your father who was the visionary,who actually built this business,and really is the core within the system of what Ranbaxy is today.’ So they’ve actually retained his photograph and his portrait is in every facility,even in the head office. I said it’s your call,we are very happy if you do.

I’m heading to the next step,that you launch this big finance company and have an IPO at the most perfect time,because the day after,that would have been disaster. And while you are an overwhelming majority,you pull out of the management and pull out of the board also,that’s most unconventional.
Shivinder: You asked the question about Ranbaxy earlier,whether Dr (Parvinder) Singh,our father,would have been okay with the decision. Dr Singh propounded and drilled into our heads that ownership and management were different and the fact that we were owners did not make us either good managers or the right to be managers. When he passed away,we were not on the board and he (Malvinder) was an executive in the company. I was not involved in the company. In a similar manner,we are in that position with Religare today. Had Malvinder chosen to follow another business track than pharmaceuticals,we would have been in Religare’s position today,which is what is exactly the principle espoused for.

Malvinder: Let me add to that. There are really two reasons why we did that. One,we clearly believe our management team is robust and we are scaling that up to a global level and we are inducting a fair amount of management depth in the management team and also on to the board. So it’s a well-run system,we have great confidence in the management team and in the board. And separately,that allows the two of us time to build the healthcare business,where we are doing something which is very unique,very different. We are today focussing on an integrated healthcare model which is for the first time happening globally. Secondly,we are taking this model internationally into multiple markets and again,healthcare is not a business which is global or multicountry. So we have dedicated our energies from our resource allocation perspective in this business.

Let me ask you a question that the layman would ask—how do people,who own 70-80 per cent of a company,run that company while not being part of the management,while not being on the board,by not even being non-executive chairmen? That is really unconventional,almost unprecedented in the Indian corporate sector.
Malvinder: But let me tell your audience one more thing. Over the last fifteen months,from the time that we actually announced to step down from the board and from my perspective as a chairman,we’ve actually increased our shareholding.

It’s a good suggestion to others whose companies are struggling.
Malvinder: We have invested more money,we have increased our shareholding,and today the company is in a much stronger position to catapult to the next level of growth.

But Shivinder,how do you monitor that company?
Shivinder: We don’t monitor it in the manner that you call monitoring. Firstly,we believe that businesses are run on robust management and leadership. We,I think,are fortunate to have found such kind of leadership at Religare and they are the ones who have put the company together. We put a great board together. It’s a competent board,it’s a board that is committed to their organisation. And in the 10-12 years that the company has been around,we have for ourselves seen that the checks and balances in their organisation to take care of the risks are very good. Therefore,it’s not a personal ambition to be sitting on people’s boards and pretending to be bosses and so on and so forth. If that company is poised to grow and has the capability to grow in itself,we’d like to do it in every business of ours.

But is it something that you would suggest to other Indian promoters?
Malvinder: If you look at the various businesses that we have,they are all run by CEOs. Today,Shivinder and my focus is on healthcare and strategy. We are not in the executive of the diagnostics business,our voyages business,retail business or any other. We are executives of only Fortis.

So I’m not wrong in calling you the most unconventional,the most interesting young pair of businessmen in India.
Malvinder: I think we believe in doing what is the best allocation of our time and where we can make the maximum impact and how best we can run our business. Fortunately,we’ve got good people,and we empower them and we hold them accountable. And tomorrow if a business is not doing well,we are shareholders and we will change what we can. But we give them their space to run.

How many hours in a week do you both spend together?
Malvinder: We are travelling,so we are not in the same city,but we are always connected. One of the things that we are very clear on is that we want our businesses to build on the value system that we have. And therefore,for example,we’re in the hospitality business vis-a-vis healthcare. But we’re not in the hospitality business vis-a-vis hotels,because we don’t believe in alcohol and non-vegetarianism,and we would not like a business that builds on that.

Do you insist on that from your employees as well?
Malvinder: No,what they do in their personal lives is their decision.

Shivinder: We don’t impress our beliefs on anyone.

Let’s talk about difficult decisions. Was the acquisition of Escorts one of your most difficult decisions?
Shivinder: I don’t think the acquisition of Escorts was a difficult decision at all. I think a lot of the stuff that got unfolded with Escorts was a bit of a surprise,probably a shock. As Malvinder said earlier,it was a life-learning lesson—about whom to trust,whom not to trust and how to get to those options. But I don’t think taking a call on any acquisition has been a fundamentally difficult decision to take.

But it turned out to be difficult,it turned out to be messier than selling Ranbaxy.
Malvinder: In life,you will always be confronted with situations which you thought would not happen. When it becomes a little more messier,you have to deal with it and deal with it correctly and do the right thing. And that’s what we did—we did the right thing for the business. If the same situation happens today,we would do the same thing.

So you never had that regret,that you had a hundred hospitals to acquire,why did you only choose this one?
Malvinder: Absolutely not. It was strategically the right call to make that acquisition,and we did it.

It did seem at one point that you were at odds with the entire Delhi upper crust.

Malvinder: How does it matter? That is a perception. But I think we dealt with it systematically,one step at a time,and we came out winning.

Do you think it could’ve been done in some manner where you were not so much at odds with Dr Trehan?
Malvinder: I think Shivinder tried everything. Everything not having worked,there was only one option. Which we did.

Shivinder: So if you ask,was it the preferred model? No. But the only models we thought were better did not have any roads which led to a happy conclusion. So this was the only road left to travel. So that is more a function of event than intent.

Two interesting consequences,you tell me if I’m right or wrong—one,it was a coming-of-age moment for the two of you. Suddenly,Delhi stood up and took notice of the two of you. Second,you also ended up creating competition,because Dr Trehan has moved out and set up his own healthcare business.
Shivinder: I think it’s a function of time and the function of perspective. We believe the journey we have to travel is a hell of a lot longer than what we have reached so far. Vis-a-vis competition,I think we are living in a market which has one bed to a thousand population,we need three times the market which India has today in terms of infrastructure. So we don’t really see healthcare as a space that has competition. Yes,local geographies will have competitors,which I think is good for business. As long as we play by the rules and we don’t do unfair practices,and that’s for both sides,I think it’s good for India to have multiple people setting up good healthcare and infrastructure. It is good for the country,it is good for us. I don’t think we see competition in the same way as other people do.

Malvinder: I would just say Naresh is a great doctor,I wish him all the best,and I wish him all the success. And I think life for us,and for me personally,changed when dad passed away. And somebody just pressed the fast forward button and nobody has removed the finger ever since.

But tell me,you talk about detachment,ambition,focusing on business,do you think a moment like Ranbaxy is the most perfect moment? If a moment like that comes,could you do that with Fortis as well? Or do you think this is now something you are so sentimentally attached to,that no matter what the price,what the moment,it would never happen?Malvinder: I would differentiate between passion and obsession. Both of us are passionate about what we do,we do it because we enjoy it,it’s not work,it’s a part of life and we love what we do. And we think there is a lot to be done,to build in these two areas that we are currently focussed on. Healthcare is at a very nascent and a very fragmented level in India and in various markets around the world. We have a long time to go and we welcome partners to come along,to work with us in different areas,to build it. We believe we have the vision,we have the ability to drive it. So we’re always objective in business,but yet we are very passionate and committed to build,to create value and make a difference to society. And healthcare,it’s a social area,and I think we are doing a lot to make a difference to India,to various markets around the world.

Do you have any obsessions?
Shivinder: Well,I think obsession for us is probably family. It’s probably the wrong word to use,but we are very passionate about our family,and whatever time we can get,we spend with the family.

Transcribed by Nimisha Jaiswal