Extortion,
blackmail and abuse of power -
The story of
“Maruti Udyog Limited”
On 16
November 1970, a private limited company named Maruti Technical Services Private Limited (MTSPL) was launched by Sanjay Gandhi,
the second son of then Prime Minister Indira Gandhi. He nominated himself as
Managing Director of MTSPL with the second Director being Sonia Gandhi, the
daughter-in-law of Indira Gandhi. The stated purpose of this company was to
provide technology for manufacturing a “fully indigenous motor car”; (basically
a car that was supposed to be 100% Indian in every way).
Sanjay Gandhi was known to be obsessed with cars and
aircraft. Maintaining his family’s legacy, he failed to get a college degree,
but Rolls–Royce (RR) of England must have seen some hidden talent in him, since
he joined them as an intern in their manufacturing unit in the UK. The fact
that he failed to complete his internship successfully is glossed over in
history. Apparently, after only three years at RR he claimed that he had learnt
all that was to be learnt about manufacturing cars, and this Gandhi returned to
India with a dream, or so it is said.
Using every resource at his command, including the office of the Prime
Minister, Gandhi started his initial production of Maruti cars in the ramshackle
truck-stop area of Delhi called Gulabi Bagh; with a chassis that he
manufactured himself and parts that were scrounged from the back- alleys of
Jama Masjid area. A refurbished Triumph motor-cycle engine was initially used
to propel this contraption. On the business front, the Gandhi family used their
political power to raise funds from industrialists and traders to fund this
project. Those who refused felt the brunt of the dreaded MISA (Maintenance of
Internal Security Act) and COFEPOSA (Conservation of Foreign Exchange and
Prevention of Smuggling Act). Thus, through threats and blackmail investments
flowed quickly into the project and Maruti Limited was registered under the
Companies Act in June 1971, within six months of the initial company being
formed.
Three decades later Robert Vadra,
son-in-law of the other Director, Sonia Gandhi of MTSPL / Maruti Limited would
recreate this amazing feat of creating a fortune out of nothing.
In September 1971, with the full backing of Prime Minister
Indira Gandhi’s cabinet, MTSPL was awarded a Letter-of-Intent to manufacture
50,000 cars annually. The Directorate General of Technical Development was
arm-twisted by the then Minister of Industrial Development,
Fakhruddin Ali
Ahmed (who was later hand-picked by Indira Gandhi to become the President of
India), to issue this LOI against all norms. While the LOI was being processed,
Gandhi found a benefactor in the then
Haryana Chief Minister Bansi Lal; who
influenced the Central Industries Ministry by recommending Gandhi’s case and
assuring land, water, electricity and finance to the project. The reason for
this benevolence was that Bansi Lal was under attack at that time by his own
party’s MLAs, who had submitted a memorandum of multiple allegations of
corruption against him; to the President of India. Bansi Lal who was a shrewd
and cunning politician, realized at the outset that the insurance of his
political well-being was the younger son and political heir of Indira Gandhi.
And so it came to pass that fertile land near village
Dundahera on Delhi-Gurgaon road was allocated to Maruti Limited at a throw-away
price, despite the fact that the potential site for Maruti factory was within
1,000 yards of a military ammunition dump. Another Gandhi family factotum V.C.
Shukla who was then the Minister of State for Defense Production, ensured that
this military facility was shifted elsewhere so that there would be no
hindrance to the dreams of the heir-to-the-throne. Low interest loans without
collateral were extended to the project by the Industrial Finance Corporation
of India, Central Bank of India and Punjab National Bank.
Laws were broken, institutions were corrupted and morality
was thrown to the winds to ensure that the ‘People’s Car’ dream was realized.
When the then Law Minister H.R. Gokhale tried to advise Sanjay Gandhi on the
legalities of this project, he was shocked by the rude response from the scion
of the Gandhi family. “Mr. Gokhale, your
laws do not apply to me”, scoffed the man who thought that he knew it all.
With this attitude of its founding Managing Director, Maruti Limited was in
deep financial trouble towards the end of 1973.
As details of these irregularities leaked out, it proved to
be a constant embarrassment to the government. Opposition leaders Atal Behari
Vajpayee, George Fernandes, Madhu Limaye and others accused Indira of
practicing the worst kind of nepotism. But this had no effect on Sanjay Gandhi.
He merrily went on from one controversy to the next. Somewhere along the line,
he managed to get his prototype tested at VRDE Hyderabad. It failed every test
and was not declared road worthy. He tried upgrading his fully indigenous
prototype, and fitted it with a German manufactured engine with the help of the
engine manufacturer. This idea also failed. Design flaws in Gandhi’s Maruti car
ranged from vibrations to steering problems to brake failure. Despite this, the
Minister for Heavy Industries T.A.Pai granted an industrial license to Maruti
on 22nd July 1974 for producing 50,000 cars.
Pai was arm-twisted to
do this by one R.K. Dhawan who started his career as a government typist but
within a few years was the Personal Secretary to Prime Minister Indira Gandhi,
as well as her confidante who used his position to control flow of information
and access to the PM. Interestingly, he would be a suspect in the investigation
of the assassination of Indira Gandhi, with the investigating commission
stating that ‘the needle of suspicion
significantly points to his complicity or involvement’ (in the
assassination). Dhawan weathered this storm and is currently a senior
politician of the Congress (I) party.
As financial losses mounted, the wizard of ‘People’s Car’
started another company Maruti Technical Services (MTS), which was heavily
funded by the failing Maruti Ltd. MTS then floated a third company, Maruti
Heavy Vehicles which acquired scrapped road-rollers, refurbished them with a
paint job and sold them as new. States ruled by the Congress party were forced
to buy these at atrocious prices.
Politics interfered in this stuttering saga of Sanjay
Gandhi’s dream project. His mother’s party was booted out of power in the 1977
general elections. The newly empowered Janata Government initiated an Inquiry
Commission headed by Justice A.P.Gupta, and based on his reports; on March 06,
1978, the High Court of Punjab and Haryana ordered the winding up of Maruti
Motors. The dream was dead via court order.
The Congress party came back into power in 1980, but before
the Maruti experiment could be resurrected, Sanjay Gandhi in his unique style
that ignored good advice; decided to perform aerobatic loops in a two-seater
aircraft over Delhi’s Safdarjung area, lost control and crashed to his death.
Post his demise, Indira Gandhi decided to revive the project.
Maruti Udyog Ltd was
incorporated through the efforts of Dr V. Krishnamurthy, and was established in
February 1981; though actual vehicle production commenced only in 1983, in
Joint Venture with Suzuki Motors Japan.
It must be specified here that Suzuki
Motors of Japan had absolutely nothing to do with the political, economic or
legal malfeasances of Sanjay Gandhi, his mother or the Congress Party.
After the death of Sanjay Gandhi and on the request of his
mother, it was Dr. V.Krishnamurthy; a highly respected bureaucrat who was
Secretary in the Ministry of Industry till 1980, who did the spade work to
evaluate various global car manufacturers to find the right partner for the
People’s Car of India. Suzuki Japan was the ultimate choice.
Dr Krishnamurty
was appointed as the Chairman and CEO of the new entity Maruti Udyog Limited in
1981, and the rest as they say, is history.
The actual production started in 1983 with the introduction
of the Maruti 800 car (depicted here sporting its original Sky Blue color)
which was based on the Suzuki Alto Kei/SS80, (depicted here in red) which was at
that time the most modern car in Asia.
In 1984, the Maruti Van with the same
3-cylinder engine as the 800 was launched.
In 1985; the Suzuki SJ410, 4WD
off-road vehicle with a 970cc petrol engine was launched. This was renamed the
‘Gypsy’ in India
and was designed with a longer tail-end than the original
SJ410.
Suzuki also tried to introduce the Maruti Pick-up mini-truck
in India, but that turned out to be a market flop.
The irony of the whole sordid saga is that the 100% Indian
designed and manufactured ‘People’s Car’, started its journey in India as a
100% Japanese imported car, since the first few hundred vehicles of the car and
van were fully assembled imports. Initially, 74% of the company was owned by
the Government of India and 26% by Suzuki Japan. As of May 2007, the Government
sold its complete share holding and no longer has any stake in Maruti Udyog.
And there we have it, the saga of total failure to popular
success; as witnessed by history.
I thank them for the opportunity.
