Steely Jindals' rise to power
How the family went from bucket-makers to Rs 17,500-crore business titans Before it became synonymous with one of the biggest scams in India's...
How the family went from bucket-makers to Rs 17,500-crore business titans
Before it became synonymous with one of the biggest scams in India's history, the Jindal group was a business conglomerate that prided itself on its humble roots. The Jindal empire was built from scratch by the late Om Prakash Jindal, who was born to a farmer at Haryana's Nalwa village on August 7, 1930. He took his first step into the world of business at the age of 22, when he set up a small bucket-manufacturing unit in Hisar. He followed it up by establishing Jindal India Limited, a pipe-production unit, in 1964.
Five years later, the Jindal patriarch set up his first big factory in then Calcutta, and thus began the illustrious history of the group that today boasts of a total worth of Rs 17,500 crore. Over the years, Jindal went on to become a successful politician, winning three terms as a member of the Haryana Assembly and representing Kurukshetra in the 11th Lok Sabha. He was known to liberally tap into his personal wealth to fund various welfare projects � also creating thousands of jobs in backward areas and building schools and hospitals. His philanthropy played no small part in steeling his legacy, so to speak.
By 1997, with Jindal devoting more and more time to politics, and the empire's geographical expanse putting a strain on the management, plans began to be made to divide the company among his four sons - Prithviraj, Sajjan, Ratan and Naveen. The eldest, Prithviraj, 46 years old at the time, took over SAW Pipes Ltd, the pipes and tubes division which clocked sales of Rs 501.4 crore during the year ending June 1996.
Sajjan, then 41, assumed the charge of mild steel-maker Jindal Iron and Steel Co. (JISCO), Jindal Vijaynagar Steel Ltd (JVSL) - an ambitious Rs 4,000-crore project for the manufacture of hot rolled coils, Jindal Tractebel - the 50:50 joint venture for power with Tractebel of Belgium, and Jindal Praxair -- a joint venture for JVSL's oxygen plant in collaboration with US industrial gas major Praxair.
An empire Ratan, who at 38 was the managing director of Jindal Strips Ltd, was given complete charge of Jindal Stainless Limited (JSL), the Rs 1,000-crore-plus flagship company of the group specialising in the manufacture of stainless steel strips and the sole producer of razor blade steel in the country. The Jindal Strips sponge iron division at Raigarh, managed by Naveen Jindal who was 27 at the time, was hived off as a separate company under his charge.
Naveen, a University of Texas Dallas alumnus, also assumed control of Jindal Power, the group's power venture, which owns, among others, the 1,000 mw coal-based thermal power project with Genting group of Malaysia. He was also made in-charge of the captive power plant at the Raigarh unit. The formal division of assets began with Sun Investments, which has an equity holding in most group ventures and in which all members of the Jindal family have a stake.
Eight years later, in 2005, the patriarch's illustrious journey was cut short by a helicopter crash, which killed Jindal at the age of 74. Following his death, most of his assets were transferred to his wife, Savitri Jindal, who now chairs the steel and power conglomerate that is OP Jindal Group. Eight years after his death, Jindal's family figures on the Forbes' list of India's 10 richest families with assets to the tune of $7.6 billion (as of March 2013).
From youth icon to political opportunist Business and politics are inextricably linked in the life of Naveen Jindal, the 43-year-old Congress MP from Kurukshetra and the chairman of Jindal Steel and Power Limited. Few would dispute that the high point in Jindal's political career came on January 23, 2004, when he succeeded in getting the Supreme Court to agree to get the Flag Code of India amended, providing every citizen the right to fly the Tricolour.
However, even this has a business connection. The seed of this event was sown way back in 1992 when Jindal was just 22 years old. Having just returned from the United States after completing his education, Jindal was an eccentric patriot of the flag-flying variety and insisted on displaying the Tricolour at his factory premises in Raigarh, in the mineral-rich region of central India.
Needless to say, it got him into trouble with the local authorities and that is how Jindal embarked upon a prolonged legal battle. Over two decades later, Jindal is in trouble with the law again. The difference this time is that the public perception is not on Jindal's side. The same person, who in 2004 was seen as a youth icon imbued with national pride, is now seen as a symbol of crony capitalism in the country.
Between 2006-07 and 2012-13, the revenue from the companies controlled by Jindal has increased over five-fold. At the heart of this windfall have been the natural resources in the country, which the CBI believes were allocated to Jindal because of his political connections. It is perhaps no coincidence that the dramatic rise in Jindal's fortune coincides with the years the Congress-led UPA has been in power.
The various entities controlled by the Jindal family, the JSPL in particular, have by far been the largest beneficiaries of the coal block allocations by the Union government. Between 2004 and 2009, the Jindals have been allocated coal blocks with reserves to the tune of 2,660 million metric tonnes. According to estimates, the difference between the Jindals and the next biggest beneficiary of the coal block allotments is in excess of a whopping 1,000 million tonnes.
BJP MP Hansraj Ahir, who blew the lid off the coal scam, claims the Congress has favoured Jindal as he is one of their own. But interestingly, the Jindal group was given blocks even during the NDA and United Front governments. But it was under the UPA that the group benefitted the most.
Over the years, Jindal went on to become a successful politician, winning three terms as a member of the Haryana Assembly and representing Kurukshetra in the 11th Lok Sabha. He was known to liberally tap into his personal wealth to fund various welfare projects � also creating thousands of jobs in backward areas and building schools and hospitals
� Daily Mail