Among the various fratricidal fights in Indian business, one of the fiercest took place around 1993 when Onkar Kanwar, then vice-chairman and managing director of Apollo Tyres, battled for control with his father, Raunaq Singh who was chairman of the company he had set up in 1976. Soon after that, he had summoned his 23-year-old son Onkar Kanwar from a university in the US to help him build the company’s first factory under the banner of its flagship firm Bharat Steel Tubes (BST).
In the beginning, the two men were extremely close. According to the book The Man Behind The Wheel: How Onkar S. Kanwar Created A Global Giant by Tim Bouquet: “They even walked the same with military straight backs.”
However, soon the company faced problems with its unions and ran into losses. Over the next few years, Onkar worked to turn the company profitable. But this phase coincided with growing differences between the two with Raunaq Singh wanting to use Apollo’s money for other businesses and Onkar determined to reinvest all profits back into Apollo.
The immediate provocation came when Raunaq Singh refused to sign the 1992-93 accounts of the company on the grounds that there had been financial irregularities including an overstatement of profits. He also raised questions over Onkar's ability to manage on the grounds that Spie Capag India and British Health Products, two of the companies promoted by him, had folded.
In turn, Kanwar, cited the company’s performance since 1980-81 when he had come in to stem its losses and had turned it around. Anticipating that there could be a move to oust him at the coming annual general meeting, Kanwar bandied his people to collect proxies from the company’s dealers who were also shareholders, such that the accounts could be passed and some of the retiring directors who he had chosen could be reappointed.
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At the AGM, instead of the customary chairman’s speech, Raunaq Singh went into a lengthy explanation of his refusal to sign the financial accounts and asked the meeting to reject them. However, the voting went firmly in Kanwar’s favor. At the board meeting that followed, the board too reposed complete faith in Onkar Kanwar.
The roots of Raunaq Singh’s feud with his eldest son lay in his belief that Kanwar was trying to wrest control over the group’s cash cow from his three other brothers who were at that time running smaller companies like Bharat Gears, Apollo Tubes and Panchsheela Rubber. There were also reports stating that the father wanted to induct Kanwar’s half-brother, Satinder Pal Singh, into Apollo, a move which Kanwar resisted.
Friction between the two had been festering for the previous 2-3 years ever since Kanwar had tried to corner the equity holding in Apollo Tyres that group company BST Manufacturing, which had been referred to the Board for Industrial and Financial Reconstruction, had.
Eventually, with the battle becoming more and more messy, financial institutions got into the act and brokered a peace agreement between the two wherein Singh retained his position as chairman and managing director of Apollo Tyres but was divested of his executive powers.
In September 2002, Raunaq Singh finally signed off as Chairman of Apollo Tyres and just a few days after that he passed away. Onkar Kanwar has since gone on to build Apollo into a globally competitive tyre-maker though in 2007 he had to stave off another challenge to his control from one of his brothers, Narinder Jeet Singh.
—Sundeep Khanna is a former editor and the co-author of the recently released Azim Premji: The Man Beyond the Billions. Views are personal
(Edited by : Ajay Vaishnav)
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