Before it
became synonymous with one of the biggest scams in India's history, the Jindal
group was a business conglomerate that prided 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. But 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 O.P. 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).
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 in 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 (see box). 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 metric tonnes.
(India
Today)
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