Making It Big Read online

  In Nepal, you do not need great ideas to become a great person. All you need to do is to hobnob with the right people. I did the same. I started an enterprise with a prince at the height of the Panchayat era. This news spread like wildfire. Suddenly, I became a distinguished industrialist. It was that easy. People changed the way they looked at me. Suddenly, I could call the shots. Even my former detractors wanted to get close to me. Everything in my business started to fall in place. I ventured into many new areas and success came my way.

  Of course, Prince Dhirendra was not directly involved in everything I did that was successful, but underlying it all was his indirect involvement. His partnership with me, which removed all the obstacles in my path that had resulted from my becoming a scapegoat in a political conflict, was the main reason for my success.

  Business is the most important thing to a businessman. I did what the regime politics of that hour compelled me to do. Everybody dominated me when I wanted to mind my own business. My investments and my determination came to naught. I became slightly shrewd for survival’s sake. They tried to do politics with my business. I did my business on their politics. We, as entrepreneurs, have to do this to survive in the ruthless realm of politics.

  In 1985, the World Bank once again decided to conduct a feasibility study of the Karnali–Chisapani hydropower project. The governments of Nepal and India agreed to evaluate the project and seal power purchase and investment agreements based on the feasibility study.

  The cost of the feasibility study was about US$25 million.

  Naturally, those construction companies that already had government contracts were chafing at the bit. We, however, were not involved in any such venture. During the height of the Panchayat era, the Palace, the government and the bureaucracy, in that order, steered the decision-making process. As the Government of India was also involved, it too had its measure of influence on which way the project went.

  ‘We should also get involved in this,’ Himalaya Pandey approached me with a proposal.

  Himalaya’s father was Sardar Bhim Bahadur Pandey, an influential policymaker and senior bureaucrat, who had also served as Nepal’s ambassador to India and Germany. He had strong links to the movers and shakers in India.

  ‘Fine,’ I said, accepting his proposal. ‘You start the ball rolling and I’ll support you 100 per cent.’

  He left his job at Gorkha Travels and became ‘a man on a mission’. We set up a separate unit at our corporate office at Sanepa for the project, with Himalaya in charge.

  A Canadian company called Acres International was involved in projects funded by the Canadian International Development Agency in Nepal. Its headquarters are in Ontario, but it had a resident representative in Nepal whom Himalaya knew well. Acres became our major partner in the Karnali–Chisapani project as part of a consortium that also included Lavlan SNC of Canada and Ibasco of the United States. The consortium was called Himalayan Power Consultants.

  Ibaso had its headquarters in the World Trade Center in New York, which was destroyed in the 9/11 terror attack. The first and the last time I went into the twin towers was in connection with this project.

  Himalayan Power tendered a bid for the Karnali–Chisapani project.

  There was a marked lack of transparency in the tender process. Our bid, led by a consortium headed by the world-famous Acres, was rejected for ‘technical reasons’. A consortium comprising Japan’s Nippon Koei, Australia’s Snowy Mountains Engineering Corporation, America’s Harza and Britain’s Binnie & Partners was selected instead. Most interestingly, the whole process was finalized at the World Bank’s headquarters almost immediately after the tender was opened. Also, prior to the World Bank approval, the Government of India had endorsed the contract. The Indian government had also been duly informed.

  We, who had been confident of winning the tender, came to know about all this much later. The Karnali–Chisapani project was not just another venture for us but a huge opportunity to establish ourselves in the field of government contracts. We had foreseen the possibility of getting these contracts on a regular basis once this project was underway. With this at the back of my mind, I decided not to give up so easily. Had our proposal or our partners been weak, I could have accepted the outcome. But despite the backing of a company like Acres, it appeared we were victims of a conspiracy hatched by our competitors.

  In those days, all government ministries were divided between and controlled by the secretaries at the royal palace, who were the ones who actually called the shots in the ministries. However, these secretaries were subordinate to the king’s brothers, who had divided the ministries among themselves. As a result, those in the position of secretary in the ministries were actually several rungs down in the bureaucratic hierarchy of the Panchayat system. The ministers were above them, the Palace secretaries above the ministers, and the king’s brothers right at the top. Apparently, the ministers would brief the prime minister, who, in turn, briefed the monarch. The king’s brothers would be briefed separately by the Palace secretaries. Though the ‘Palace channel’ was not formally recognized and only existed behind closed doors, it behaved like a legitimate bureaucracy. The prime minister, Surya Bahadur Thapa, described this as a system of ‘dual rule’.

  We decided to attempt the Palace channel. Neer Shah arranged a meeting for us with Prince Dhirendra. Not only did Dhirendra and I have a relationship of trust, but coincidentally, water resources was one of the ministries under his unofficial control.

  We briefed him about Himalayan Power Consultancy and the companies associated with it. Accepting the possibility that we had been unfairly treated, he launched an independent investigation. Lal Bahadur Kadayat was the minister for water resources during the tender process. Later, the ministry was headed by Pashupati Shumsher Rana.

  Prince Dhirendra summoned Pashupati Shumsher and told him that it appeared Himalayan Power had been dealt an injustice during the Karnali–Chisapani tendering process. Pashupati Shumsher tried to evade the matter, saying the decision had already been made and signed off on by both the World Bank and the Government of India.

  Meanwhile, Himalayan Pandey, Neer Shah and I went to meet high-ranking officials at Acres in Ontario to tell them what had been happening. At the time, Prince Dhirendra was in New York, where his mother was undergoing medical treatment. We, along with representatives of Acres and the other companies in our consortium, went over to New York to meet him. Prince Dhirendra was impressed with our partner’s capabilities, and became convinced that our consortium had not only been treated unfairly in the tendering process but that we should have won the contract too.

  ‘I shall discuss the matter with His Majesty my brother,’ he said.

  After returning to Kathmandu, he told King Birendra that he believed the minister and the palace secretaries had manipulated the Karnali–Chisapani tender. King Birendra too was convinced about it and ordered Pashupati Shumsher to revoke the previous decision and ‘award the tender to Himalayan Power Consultancy’. King Birendra’s firm directive was that if the project was to go ahead at all, Himalayan Power must get the tender.

  Prince Dhirendra sent a message to us: ‘His Majesty has already issued the decree. Go and meet Pashupati.’ Himalaya Pandey went to meet Pashupati Shumsher.

  ‘How dare you ask the king to make me do this?’ Pashupati Shumsher exploded at Himalaya, who still loves to tell the tale of that meeting. Furious, Pashupati Shumsher stared him in the eye and said, ‘We have already written to the World Bank and the Government of India. How can we possibly revoke the decision now?’

  However, despite his ranting, he had to find a way to tackle the issue to comply with the king’s direct order.

  In accordance with his advice, we lodged a written complaint against ‘irregularities in the tender’. The ministry of water resources appointed Bechtel, an American engineering, construction and project management company, to conduct an independent review of the entire tender process. Bechtel concluded that ther
e were anomalies in the process and that the tender should have been awarded to Himalayan Power Consultancy. The ministry forwarded Bechtel’s report to the World Bank and the Government of India, based on which it was decided to award the contract for the feasibility study of the Karnali–Chisapani hydropower project to us.

  The project took about five years. We also did a lot of other work such as laying the transmission line and constructing substations in collaboration with Kamani and Best & Crompton engineering companies.

  This incident demonstrates how a businessperson, irrespective of his competence, has to ‘do business in politics’ to survive political conspiracy.

  Rift with the Palace

  The relationship I had established with the royal palace in 1984 through Prince Dhirendra ran into troubled waters towards mid-1989.

  During my association with Prince Dhirendra, I had also established a close relationship with King Birendra and Queen Aishwarya. King Birendra gave thirteen audiences to me; he attended weddings in our family, visited the Wai Wai factory, and even invited me to the Nagarjuna Palace, discussing with me a range of subjects, including my future business plans. Everything was going well, until an incident that quickly destroyed my five-year relationship with Dhirendra.

  An affair between Prince Dhirendra and a British woman was the talk of the town in those days. As a result of this affair, his relationship with his wife, Prekshya Rajya Laxmi Devi Shah, had soured. Prince Dhirendra could no longer stand living in the Palace. He decided to reject the trappings of royalty and left the country. The Palace handed over all the businesses he owned to his wife. The shares in the factories in which he had partnered with me were also transferred to her.

  Before this happened, I had had a cordial relationship with Prince Dhirendra’s wife. However, in the changed circumstances, she started to stake a claim on the factories without trying to understand the depth of the relationship between Prince Dhirendra and me, as well as the facts behind our partnership and the accrued benefits and obligations. She started to send her aides to me on a daily basis with lists of unrealistic demands. In the absence of Prince Dhirendra, the Palace group that had tried to ruin me during 1979–84 became active again.

  In March 1989, a staffer from the royal palace came to me: ‘Her Highness has summoned you to Jeevan Kunja.’

  Jeevan Kunja was the palace where Prekshya lived.

  Father became nervous as soon as he heard this. He was afraid something sinister was afoot. ‘Relax, Father, they can’t harm us,’ I told him, to allay his fears.

  Father and I went together to Jeevan Kunja. We were escorted into a huge drawing room. Ram Bhattarai, Dr Shyam Bahadur Pandey, Tej Prakash Shah and a few other aides of Prekshya were there already. I had thought of some of them as my friends. Prekshya had not arrived yet, and her aides whispered among themselves while we waited. Sometimes they looked in our direction, but no one spoke a word to us. If our eyes met, I would smile at them. Otherwise, I busied myself studying the portraits hanging on the walls or looked at the chandelier. Father was silent.

  We were sitting opposite a huge closed door. I was secretly watching what Prekshya’s aides were doing, and noticed they kept glancing towards the door. I guessed she would enter the room through that door. The door finally opened. Prekshya entered bearing a royal air. The aides immediately sprang to their feet, pressing their palms together in a gesture of respect, and bowing from the waist. We too rose, pressing our palms together. In those days, the royals did not return greetings.

  Prekshya darted like lightning to the largest and grandest chair in the room. Her aides sat down after she took her seat. We too sat down.

  She looked at me and said pompously, ‘Binod, I have decided to give the shares of Apollo Steel to Golchha.’

  Everyone in the room turned to look at me. They probably expected me to say, ‘Yes, Your Highness.’ But I was infuriated by what she had said. First, Prekshya had no legal basis to stake a claim on Apollo Steel. Second, she was trying to hand over the shares to someone who was not just a business competitor but also a rival at a personal level.

  I remained silent for a while, struggling to control myself.

  Once I had regained my cool, I said in a low voice, ‘Your Highness, how can you do that?’

  Prekshya and her aides stared at me, wide-eyed. They looked as though they wanted to eat me alive.

  ‘Why can’t I do that?’ she asked in a reprimanding tone.

  ‘Your Highness, I hold majority shares in this factory and I’ve taken a loan to cover the rest of the investment,’ I replied politely and with dignity. ‘How could Your Highness suddenly think anyone you wanted could be brought in?’

  ‘What?’ She rose from her chair in rage. ‘You are going to disobey my order?’

  Her aides rose with her. We too got up. They were trying to intimidate me using the royal customs and conventions.

  ‘Your Highness,’ I said, ‘I couldn’t obey your order even if I wanted to.’

  ‘What do you mean?’ She sat down again, and her aides sat down as well. We continued to stand.

  ‘Your Highness, I took a bank loan to establish this factory. The loan is in my name.’

  ‘So what?’ She flushed with rage.

  Father was scared. He was pulling at my sleeve, trying to make me stop talking, but I would not.

  ‘I hold 51 per cent of the shares. I let His Highness Prince Dhirendra have the remainder in return for a favour. Also, you should be aware of this document which His Highness gave me.’

  I pulled a piece of paper out of my pocket. It was a document drawn up at the time of establishment of Apollo Steel. On it was written: ‘I have borrowed Rs 4.9 million from Binod Chaudhary to buy 49 per cent of the shares.’ It was signed by Prince Dhirendra.

  ‘Okay,’ she fumed, without even looking at the document. ‘You will not obey me, right?’

  ‘Your Highness, it’s not a question of obeying or disobeying; I am just not in a position to comply. Prince Dhirendra has borrowed from me and I have also borrowed money to cover the cost of His Highness’s shares. How can I include Golchha in the company until I get my money back?’

  ‘Fine! I know what to do next.’ She rose from her chair and left the room.

  The aides too sprang to their feet and bowed low. Silence descended on the room. Every one stared at me as though I were a criminal. Then they too walked out of the room.

  Father was so scared that he started to tremble. I took his hand and led him out of the room. We drove straight home. Father did not utter a word the whole way. He was clearly disconcerted.

  ‘Relax, Father, they can’t harm us,’ I told him calmly.

  I had been prepared for this development even before the meeting at Jeevan Kunja.

  Immediately after the meeting, I met advocate Kusum Shrestha. Throughout the Panchayat regime, Kusum Shrestha and Ganesh Raj Sharma had fought legal battles on behalf of the Nepali Congress, the first and largest political party in Nepal. I told him everything that had happened between me and Prekshya Shah. I also showed him the receipt signed by Dhirendra.

  ‘You have a very strong legal document there,’ he said. ‘Legally, nobody can touch you. Nonetheless, while the monarchy still has direct control of the country, who knows what lengths they might go to? You shouldn’t wait for them to make the next move. You should go on the offensive.’

  ‘What should I do then?’

  ‘Send a legal notice to Prekshya Shah. Since Dhirendra has taken a loan from you against 49 per cent shares in the company, you should submit a legal request for that money to be paid back.’

  Taking Kusum’s advice, I sent a legal notice to Prekshya. In short, it said, that I had a document proving that Dhirendra had taken loan from me to buy a 49 per cent share in Apollo Steel. Either that loan must be repaid or the shares returned to me.

  I did not receive a reply. In accordance with the provisions of the Company Act, we sent three notices. Still there was no response. The royal pa
lace considered itself above the law in those days.

  Then Kusum suggested another move. As the majority shareholder, I could call a general meeting of the shareholders with the aim of raising capital through additional investment from them. All the shareholders would have to make additional investment in proportion to the number of shares they held. The shareholding of those who failed to make the additional investment would automatically decrease. I called the general meeting, raised the level of investment to increase capital and, as Prekshya declined to make the additional investment, the proportion of her shares in the company automatically reduced.

  I won the legal battle, but I feared for my physical safety. I came up with a way to tackle that too.

  I approached Kishunjee, a founder member of the Nepali Congress. Father had an extremely cordial relationship with him. Kishunjee and other senior Congress leaders, including Yog Prasad Upadhyay, would visit father at our Khichapokhari home. Father used to live on the upper floor. Kishunjee would walk straight up to my father’s room and sit beside him. He would then ask for paan. They had that kind of relationship. I, quite immature at the time, would wonder who this person could be. Father would later tell me, ‘I would offer them paan out of respect. But, to my horror, the secret agents of the Panchayat regime would also be following them.’

  I told my story to Kishunjee. He replied, ‘Binod babu, hold your head up high. You don’t need to worry. They can’t harm you. Their days are numbered. You should support our movement wholeheartedly. You take care of us, and we’ll take care of them.’

  His support boosted my morale. I felt proud.

  I began to support the democratic movement strongly and openly. As a result, Prekshya and her aides could not directly harm me. However, I think they succeeded in poisoning the ears of the king and the queen against me, because from the day I joined the movement, I was never again granted a royal audience.