How Indian Millionaires Make Their Money

In Kenya, nearly three quarters of all the significant businesses are owned by Indians even though their population is a mere 100,000 in a population of 34 million. How have they made their wealth?

ALL over the world, the Indian businessman is a puzzle. Hardly much is known about him. Only one thing is obvious - he is a wizard when it comes to money making.

In Britain, for example, the Indian has hardly settled down. Yet among the 20,000 British millionaires, you can count 1,000 Indians. And they didn’t go to London swimming in money. In fact many of them arrived there the way Saint Singh Chatwal arrived in the United States - with a miserly $6 (Shs420) in his pocket. As a non-Muslim, Chatwal found himself in an uncomfortable situation in a newly created Pakistani. He hungered to flee. And he did - first to Ethiopia where he had been promised a job in the airline of Emperor Haile Selassie. He turned down the job when he found that he had to keep aside his turban and cut his beard and long hair.

Instead, Chatwal took a job as a clerk in a Lebanese restaurant in Addis Adaba. With savings from the little salary he earned, he opened his own restaurant selling Indian foods. But, like in the case of Indians in the Uganda of dictator Idi Amin, Chatwal lost everything after the death of Emperor Haile Selassie. And again, he was on his feet. This time he ended up in Montreal, Canada, where he bought a bar and grill.

Within a year, he opened a French restaurant. It was time for Chatwal to spread his wings. In New York, he opened a trendy Indian restaurant which he called Bombay Palace. It was the start of a chain of Bombay Palaces in Washington, Denver, SanFrancisco, Chicago, Berverly Hills, Vancouver, Toronto, Montreal, London, Hong Kong and then back near where he started, New Delhi.

Needless to say, Chatwal is a mega millionaire. He is not alone. In the United States, it is said that the diamond trade is quickly passing over to Indian traders who have become the new millionaires.

Business Success

But as the Indian has become an international business success, so has the question been persistently asked: How does he do it? The Indian himself says little, and the little he does is only to emphasize his persistence and determination. Chatwal says, “The trick is to be patient and to do as much research as possible on what is available. This is where my heritage and background make a difference. I have the inner patience to be persistent and to put things in proper perspective”.

Inner patience and persistence must, of course, be there. The Indian sub continent is teeming with people and poverty and those who leave who leave it must be goaded by the specter of misery to push ahead. Not that in India itself, you cannot become a millionaire. In fact there are so many recent millionaires that their success is as much of a subject of analysis there a it is the rest of the world.

But unlike anyone else, the Indian is looking for possibilities to make money anywhere and in anything. At home, in India, the Indian has duplicated—Japanese style - practically anything he can. In the process, industrial complexes have been established that have displaced most of the multinationals.

Money Mania

And the Indian has matched on, in what one Indian newspaper has called, “the money mania” to compete with the multinationals in the multinationals backyard. “The new trend,” says an Indian economist commenting on the situation in Indian, stems from a growing realization that money alone can provide social recognition to a degree unmatched by the possession of other qualifications, like education, family background or culture. Money is also the means to the highest social positions from where politicians can be influenced and even are keepers of law manipulated.”

What is true in India is true of the Indian businessman everywhere else. The New York based Srichad Hinduja is a perfect example. He comes from what an American magazine called a “dim background.” Yet together with his three brothers - Gopichad, Prakash and Ashok, Srichad, 63, has made a business empire stretching from Bombay to Tehran to London to Geneva to New York and Washington. He lives in a $3.3 million (about Shs. 198 million) worth apartment in New York. On the living room shelf sits an elaborately framed photo of the late Shah of Iran. Other photos around it include those of George Bush, Margaret Thatcher, Edward Heath, Indira Gandhi, Rajiv Gandhi and Mother Teresa.

In Kenya there are some 700,000 Indians, but their economic power is far in excess of their population. Since the pre-independence days, Indians have worked steadily at increasing their representation in business. In 1955, for example, the white population in Kenya was at the lead owning over 50 per cent of all business enterprises. By 1960, things had already begun to change. The Whites owned 151 of the all companies incorporated in Kenya at that time with a total nominal capital of £1,834,795. Indians owned 126 while the African trailed behind with eleven companies and a total nominal capital of £50,000. Companies with mixed racial ownership were 12 with a nominal capital of £107,00.

Top Of The Heap

By 1966, the pattern was completely different. Indians had gone to the top of the heap with 165 of all the companies incorporated in Kenya. The total nominal capital was £1,412,725. Europeans, now owned 138 companies with nominal capital of £941,910 and the African owned 87 of them with a nominal capital of £428,550.Today informed estimates put Indian ownership of local business enterprises at 80 per cent making them the one single most powerful economic block in the country. But just how do Indians make their money? As one writer said in an American magazine, the Indian millionaire believes in making himself mysterious. “Create an aura of mystery around you, and you will forever enjoy power and prosperity,” seems to be their saying.

So the Indian has build an impassable wall around himself. He has isolated himself, surrounding himself only with his own kith and kin. Srichad Hinduja for example, ensures that in his world wide empire, only his brothers and close relatives work in the top management. What has emerged is a changing picture of the Indian millionaire depending on who is looking at him, when, where and why. We found the same conflicting ideas when we asked the Indian millionaires how they made their money. Many Africans believe the Indian is not an honest business man.“The shops you see are just cover-ups for dirty jobs inside,” said one African businessman. And this image is confirmed by the fact that in every major shady deal, the Indian businessman is involved. In currency smuggling, there is the Indian businessman. In illegal goods importation, the Indian businessman features prominently.

And even when it comes to making a straight shady business the Indian businessman has no qualms. In fake insurance companies, in fake car theft tracking companies — in deed, in every type of business—you will find a large Indian one operating on the borderline if not right inside the criminal area. Take the case of video shops that thrived upto only recently.. Few Africans, if any, who have opened such shops have made any money that is worthy talking about. The Indian video cassette dealer made millions. How did he do it?

How this happened is pretty simple. The Indian often has a relative in London and another in the United States. The relative records all the programmes of interest on the TV in London or New York, then sends them to the Indian business man in Kenya who makes several copies and opens a video library. He has spend nothing, except the video cassette on which the programme is recorded. It was then estimated that 90 per cent of all the video cassettes in the market in Kenya were recorded in this way -without a cent’s expense to the Indian video cassette owner. Big scandals like Goldenberg and Grand Regency Hotel have firmly embedded the belief in the Indian businessman’s dishonesty to the Kenyan.

The truth is, of course, that, in the rest of the world, the Indian businessman isn’t very different. Srichad Hinduja and his brothers are said to sell harmless commodities such as fertilizers and edible oils to Iran. But according to records, the Hindujas have acted as middlemen for supplying US spare parts for Iranian air force. Saint Singh Chatwal, about whom we talked at the beginning of this story smuggled $400,000 (no about KShs28 million) out of Ethiopia and put it in a New York bank while he was running his small restaurant in Addis Ababa. It was the money he used to set, himself up in Canada. In other words he was engaged in draining Ethiopia of its meager foreign exchange.

“Money is means to freedom,” says Anjum Rajabali, an Indian noveau riche when talking to an Indian magazine about how the Indians make money. And the Indian everywhere seems to agree with this. And the “rich” Indian uses his money “wisely” - getting a politician to support him, a well placed civil servant bank manager. It ensures the Indian businessman gets what he wants when he wants it and wherever he wants it. Take for example government contracts. Because of this extensive network of power, the Indian will get government contracts even when his quotations are higher than those of the African businessman. Practically all irregularities involving government supplies have had a rich Indian businessman involved.

And there is the extensive network - unbreakable chain that groups all the Asian businessmen to create a closed business circle. It comes to force immediately there is a threat of competition. Once a competitor comes, all the Indian businesses drop prices - generally they will buy their goods at cheaper prices classed as bulk buying. If the competition has some money left and can drop his prices, then he will have to content with a “shortage” of the commodity from the manufacturers who are also Indian. In the end the poor competitor will be forced to sell out to the Indian. It happened when Africans took over business from Indians in Nairobi’s River Road and the Biashara street. Today almost ll the shops have gone back to the Indian trader. Name any sector of business in Kenya - even in transport where many companies use very localized names - and the Indian businessman dominates.

Despite this however, it is fair to concede that the Indian businessman does have a business talent. a business talent. Everywhere around the world, the Indian businessman is credited with commitment and persistence.

Analyzing the rise of the Indian businessman in Britain, a UK newspaper observed this commitment and persistence. While the British closes his shop at five and on holidays, the newspaper observed, the Indian businessman is open practically throughout the evening and on holidays. One Kenyan Indian businessman told Investment News, “Asians are rich because they work as a team whenever they launch a new business. We are all the time working without leisure”.

When an Indian wants to go into business - which is always - other Indians will lend him money without interest to start the business which he pays back only when his business has picked up. Because of this there is pressure for the Indian businessman to succeed. “It is an unforgivable sin for an Indian to fail in business”.

This has brought about another good point. The Indian businessman starts the business he knows best about - the business that has always been in the family. Sikhs will start garages, construction firms or furniture The Shahs are renowned for their network of shops and so on. This is fact that has been noted by analysts all over the world. It means that the Indian concentrates on one line of business which he can do best.

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