In 1993, Mr. Onkar Kanwar Singh (Onkar), the eldest son of Mr. Raunak Singh (Raunaq), the founder of a large conglomerate that included Apollo Tyres Ltd (ATL) had turned the entire board of ATL against him. The board had decided to make Onkar the Vice Chairman and Managing Director, while making Raunak a figurehead Chairman. 9 years later, in 2002, Raunak Singh had to give up his Chairmanship to his son Onkar in another engineered board mandate, just a couple of weeks before he passed away in his sprawling Delhi mansion, a desolate man.
Raunaq had built a business of manufacturing and selling steel pipes in Pakistan, before he had moved to Delhi during partition as a penniless refugee. Once in India, he set up a cycle shop, spice shop and steel tube trading agency in Delhi before setting off to Calcutta to set up Bharat Steel Tubes. Owing to his close connections with the government at the time, Raunaq set up Bharat Gears, Raunak Finance, Raunaq International, Raunaq Automotive Components and then Apollo Tyres. At the height of his success story, Raunaq owned 6 companies in 1972. He was also made the first Chairman and Director of Maruti Udyog. Since business at the time grew based on one’s ability to get licenses, the business tended to grow in a diversified fashion that might seem haphazard to the viewer. Since the focus was also to develop small scale industries, there were limitations imposed on growth of the manufacturers. Raunaq had become a force to reckon with in the industrial circle had headed the two competing industry bodies FICCI (Federation of Indian Chambers of Commerce and Industry) and ASSOCHAM (Associated Chambers of Commerce and Industry).
The first seeds of discontent in this family was sown when Bharat Steel Tubes handled by Onkar, who had returned from University of California with an MBA, went bust in 1980. According to Raunaq, his son had demonstrated ‘bad business record’ but Onkar believed that he was instrumental in setting up the Steel Tubes factory that was ‘Pride of India’ and one of the best tube makers in the country at that time. His father continued to work by diversifying and trying to build a conglomerate while Onkar wanted to consolidate. The belief was that while Raunaq was a successful businessman in the license permit raj, his son was more suitable in the more competitive atmosphere of the post liberalization era. Raunaq had handed over the day-to-day operations to his son Onkar and was busy with his networking activities.
In the initial days, Apollo ran into many problems since the company was headquartered in Gurgaon while the factory was in Kerala and was a unionised workforce. In just 2 years, Apollo had wiped out its net-worth 4 times. The loses were to the tune of 30 cr for a capital base on 8 cr. However, when Onkar took over the day-to-day operations, he got all the senior management team on his side by setting specific objectives based on profitability. He changed the middle level management team and recruited young people from local colleges with a fire in the belly. He also met financial institutions and raised cash for his development agenda. The company stopped producing all types of tyres and focussed only on big ticket items such as the truck and agricultural tyres. They chose localization of technology. In 7 years the company hit the Rs.100 crore mark. They also set up new factories across India in Gujrat, Chennai and Kalamessery in Kerala to de-risk.
The struggle began once the company had become successful. The father accused the son of siphoning off funds, lack of transparency and accounting and depriving family of their shares as well as funding Harshad Mehta during the scandal. At the same time, the company continued to grow and innovated with market approaches such as market segmentation in this sector. Apollo Tyres also worked on improving employee friendly measures by introducing down-payments for vehicles and loans as well as funding children’s education. All of these initiatives put Onkar in the driver seat and the board gave him full control of the company in 1993. Onkar was able to detach the business from the family tensions and innovate and grow the company while the tussle continued on the outside. They not only made market innovations but also became champion of indigenous technology. Coupled with Raunaq’s dwindling influence in corridors of power, his business initiatives earned him the support of the board.
Raunaq wanted his son to ‘build a conglomerate’ – his idea to take away money from one company to build another. According to Onkar, “I wanted to become the number 1 tyre maker, he wanted something else at the cost of Apollo Tyres. That was unacceptable to me”. His father was agreeable to scenario in which each of his sons from his first marriage would be small but successful players within a large group. When Onkar refused to part with cash, Raunaq tried to unsuccessfully induct his other sons on the board. But Onkar appointed his son Neeraj as COO and did not want his brothers on the board or share into what he considered was his business. Raunaq tried to build new businesses post his break away with Onkar – he tried to build agro-fertilizer business, steel factory and enter into education. Of the 4 sons of Raunaq from his first wife, Onkar had taken over Apollo tyres way before Raunaq passed away and the Bharat Gears was in the control of Surinder Pal Singh. He has also taken Raunaq International to greater heights. Raunaq’s younger son Narinder had been given a company called Panshila Rubbers which has not done well. He was upset that Apollo tyres was taken away by Onkar which was in 2007 a million dollar company.
Narinder made a complaint to the Company Law Board in 2007. Allegation registered with company law board: “The affairs of the company are being conducted in a manner so as to deceive the shareholder and the funds of the company are being utilised for ulterior and illegal purposes to make investment in such a manner that the control of Apollo Tyres is concentrated in a few hands, i.e. O.S. Kanwar and his family members.”
Currently, promoters control 32.43 per cent of Apollo Tyres (ATL) and Onkar Singh’s two sons Neeraj Kanwar, who’s Joint Managing Director & COO, and Raaja Kanwar, who’s a director, sit on the board of the company. But nothing came of this since the brother did not own any shares of the company.
The rest of the family has now given up their fight with Onkar. His son Neeraj now is the VP and MD of Apollo Tyres Ltd and his elder son Raaja kanwar is the VP and MD of Apollo international that is into movies, distribution and other diversified activities. At this time, both his sons have diversified interests and hence Onkar claims, there is no tension between the two.