Manu Rajaram Chhabria was an upstart, an audacious first-generation businessman who built an impressive industrial group from scratch. In the 1980s, he went on a takeover spree, so much so that a delegation of Indian industrialists went to complain about him to the then finance minister, S. B. Chavan.
Vijay Mallya, in contrast, and the second protagonist in the saga of Shaw Wallace & Co. (SWC), was to the manor born, the son of legendary businessman Vittal Mallya, who left him such jewels as Hoechst AG, Cadbury India and the iconic Kissan, among many others.
In 1973, Chhabria, the corporate marauder, was yet to take wings. Stuck with his forlorn electronics shop in Lamington Road, which later became a synonym for Mumbai’s computer grey market, he was a man in search of an opportunity. A chance meeting with an Arab importer at Delhi’s Oberoi Hotel provided him just that. Soon after, Chhabria left for the desert, as he called Dubai, to seek his fortunes. Here he set up an electronics trading agency, Jumbo Electronics.
But that was just the start of his journey. The lanky Sindhi raider, who was fond of flashing his wealth even as he laced his conversations with colourful expletives, proceeded to mount sorties on many blue chip companies like Dunlop, Mather & Platt, Hindustan Dorr Oliver, Genelec and, of course, Shaw Wallace.
The hostile takeover
In this last, his brashness and Martian verve were matched with young Mallya’s as both men set their eyes on the British-era distiller, famous for its brands like Director’s Special, Haywards and Royal Challenge. The SWC portfolio of popular whiskies and rum brands commanded 15% of the Indian-made foreign liquor market, with annual revenues topping ₹1,200 crore. It presented an enviable opportunity for both Jumbo and United Breweries.
As it turned out, Chhabria used Mallya as collateral. He lured the self-proclaimed liquor baron into believing they could aim for joint ownership of SWC. Mallya, too, needed Chhabria to buy the foreign holding in SWC since Indian companies were not allowed to do that. As a marriage of convenience, there was little trust between them, with each man only using the other to further his interest. A happy ending with the two brash tycoons walking arm in arm whispering “I think this is the beginning of a beautiful friendship” was unlikely.
Chhabrias’s path to SWC had begun with a fortuitous discovery. In 1985, he learned that a 20% stake in SWC held by a Hong Kong-based company was up for grabs. Sensing an opportunity, he quietly accumulated shares through a web of overseas companies to avoid triggering India’s stringent takeover regulations.
The stealth caught SWC’s board off-guard. By the time they realised the threat, he had built a controlling interest. In a dramatic courtroom showdown that was grist for newspaper reporters, in 1985, Chhabria installed himself as chairman, ousting the redoubtable S. P. Acharya, who knew the company like the back of his hand, having swivelled from assistant accountant to chairman in the course of a glorious career.
Eventually, Chhabria turned the tables on the defiant Acharya, accusing him of milking the company dry even as he struggled to stave off the hostile bid. By 1985, he had a 39.5% stake in the company, and Shaw Wallace finally belonged to him. Following the takeover, the elegant Raj-era SWC building in Kolkata’s Dalhousie Square quickly got rid of its teak and mahogany and got in marble and kitschy statues heralding the new ownership.
The betrayal
As for the Mallya partnership, Chhabria abandoned him the moment he found himself in the driver’s seat. Chhabria and Mallya would later be charged with having colluded in acquiring 38.7% overseas shareholding in violation of foreign exchange regulations. But it was Mallya who faced the music. As K. Giriprakash details in his 2014 book The Vijay Mallya Story, on 5 June 1985, Mallya was picked up by the cops on charges of violating the Foreign Exchange Regulation Act and had to spend the entire night at the police commissioner’s office at Bengaluru’s Infantry Road.
Chhabria, as he did throughout his career, escaped the heat. In fact, rumours suggested he was the one who had tipped off the enforcement directorate about Mallya.
Everything panned out nicely for Chabbria till his fatal split with brother Kishore Chhabria in 1992, which led to fights over control and legacy that would last till his early death at 56 in 2002. Sadly, his admirable legacy as a self-made tycoon would continue to be tormented even after his death, with a messy battle ensuing between two of his daughters and his wife over property.