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| Vol. 4, Issue 5 May 2012 |
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Reporting & Essays |
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Profile |
Company Man
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| The firm that once colonised India is now owned by an Indian businessman. Can Sanjiv Mehta turn history on its head—and make a tidy profit in the process? |
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Published : 1 September 2011 |
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DAVE STELFOX FOR THE CARAVAN |
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| The East India Company store on Conduit Street in London.
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OR A WEALTHY MAN who lives in a lavish house at the end of a private road in the upscale borough of Harrow on the Hill in northwest London, Sanjiv Mehta has slept in some unusual places in his 49 years. On a cold night in 1991 in the port of Saint Petersburg, he dozed off on a wooden bench near the customs clearance area of the warehouse, inside which |
lay containers filled with coffee he was exporting to Russia. The coffee had arrived from Kotka in Finland, and was due to be shipped to Moscow the next day.
With the collapse of communism, Russia was turning into a Hobbesian state, a land of no norms, in which every transaction was assumed to be the last, and nobody wanted to give an inch. Mehta was in Saint Petersburg that night because he was troubled by a series of thefts that had emptied entire sealed containers of his goods. He had lost three shipments so far, each with goods worth $90,000. It was uncanny, and seemed impossible, because once the paperwork was done, the containers were padlocked and sealed in Kotka, and the keys were sent separately to the buyer to prevent the goods from being pilfered along the way.
And yet, when the containers reached Moscow they were empty, even though their locks and seals were intact. There was no sign of forced entry, no fingerprints that could be traced back to the criminals. The insurance companies refused to settle the claim: without evidence of damage, Mehta couldn’t prove that the goods had been stolen.
| DAVE STELFOX FOR THE CARAVAN |
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Displays at The East India Company store in central London. |
Mehta examined the containers closely and found that the thieves had figured out a brilliant way to steal his goods. They would unhinge the door of a container, remove the door, take out the goods, and bolt and reseal the door after replacing the hinges. The padlock was still in place, like a clueless nightwatchman unaware of what was going on behind his back.
So when the next shipment was scheduled to depart, Mehta flew to Finland. He saw the container being loaded properly in the truck in Kotka, and sat with the driver during the journey to the port. He travelled with the container on the ship all the way to Moscow, saying nothing. It was an arduous journey, and a dangerous one: the Russian mafia was infamous for its violence. (Mehta had already been threatened once in Yekaterinburg.) In the end, nothing happened—the thieves knew he was on board. But they got the point, and the thefts stopped.
“The Russian commodities boom was a good one,” he said. “But there were risks.”
Traders spy opportunities before others do. They gather data, collect information and process what they’ve absorbed. And then they take steps after calculating the risks. A good trader likes to win. More importantly, he hates to lose. And Mehta hates to lose. I know; I went to school with him. One of our classmates, now a diamond trader in Antwerp, still recalls playing carrom with Mehta. “It was difficult to beat him at anything; he set his heart upon winning something, and he usually got it,” our classmate said.
| DAVE STELFOX FOR THE CARAVAN |
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Displays at The East India Company store in central London. |
Mehta’s latest coveted treasure is an unobtrusive store on Conduit Street, a tiny lane which lies at the edge of Mayfair, the fashionable district in central London. The upscale Mayfair, with its fine restaurants and discreet offices of boutique consultants, connects Regent Street with New Bond Street, with Oxford Street running to its north and Piccadilly to the south. These names are redolent with imperial grandeur; any child who has played the board game Monopoly can recall them with ease, although real estate today is a bit pricier than on the Monopoly board. (At school, Mehta was also an astute Monopoly player; he beat me the few times we played.)
There are nearly 300 shops in this area, with monthly rentals running anywhere between £200 and £900 per square foot (roughly  14,000 to 65,000), making this golden rectangle one of the most expensive retail districts in the world. Conduit Street has Vivienne Westwood, the doyenne of quirky British design; Rigby & Peller, which supplies undergarments to the Queen; Belstaff, which made the overcoat worn by Sherlock Holmes in a BBC television series; Oliver Sweeney, who shod the Ashes-winning English cricket team; and Berluti, the home of handmade shoes. Jutting out of Conduit Street is Savile Row, where old-fashioned tailors, one of whom actually wears a monocle, continue to make bespoke suits for gentlemen of discerning taste. Posh restaurants and hotels like Claridge’s, The Ritz and The Connaught are nearby, as are the boutiques of Burberry, Chanel, Hermes and Ferrari.
Mehta is very proud of his shop on Conduit Street. It is called The East India Company.
Yes, the same one. In one of history’s ironic twists, a Gujarati man born in Bombay now owns the company that was set up at Leadenhall Street at the end of the 16th century by British traders and merchants who went around the globe looking for a good cuppa and some spices and ended up colonising half the world—including India, the jewel in the crown—before collapsing in 1873. The company has been revived, but now it sells luxury teas, coffees, chocolates, jams, biscuits and chutneys. The minimalist 2,000 sq ft shop has a staff of 35, and aims to rake in £6 million (433 million) in its first year.
| DAVE STELFOX FOR THE CARAVAN |
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Sanjiv Mehta, who has relaunched The East India
Company with the opening of a store in London, after buying
the remnants of the British trading giant that once ruled much
of the subcontinent. |
To be sure, The East India Company had ceased to operate when it was dissolved in 1873, its balance sheet smeared with red ink, as its income simply could not cover the cost of maintaining the empire it had built. After setting up trading operations in India in the 17th century, it had rapidly transformed from a mercantilist trading firm into a state, taking over territory, minting currency and maintaining its own army. The Sepoy Mutiny of 1857 (as the British view what Indians call the first war of independence) delegitimised the company’s political role in the eyes of the British establishment. Queen Victoria took over the governance of India in 1858; 15 years later, the debt-ridden company was dissolved.
But sometime in the 1980s, a group of British investors came together, and sought government approval to begin trading using the company’s title, in effect reviving it. Few knew about it then; the investors didn’t make any plans public, keeping a low profile.
One of the commodities they traded in was tea, and it was to Mehta that they turned for the trades. He saw huge potential in rebuilding the brand, even though he knew buying the company from a group of investors would be a daunting, time-consuming project. He understood the political significance of an Indian trader taking over the company that had once colonised India, and he was aware of the negative connotations the company’s name suggested for many patriotic Indians. Why should an Indian revive a company that enslaved Indians and sent them to far-flung places as indentured labourers?
Slowly, step-by-step, Mehta began buying over the investors, and after nearly three years, he bought out the last investor, acquiring full control of the company in 2006. At the same time, he studied the company’s history, consulted experts, talked to brand consultants and began assembling in his mind the architecture of the company that would no longer be an embarrassment, but would nurture the brand.
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Readers' Comments |
Total Comments
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atul shah
2 October 2011
09:14 PM
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Fabulous only a true new erait can do this. He was capable of this.
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Viki
2 October 2011
10:12 AM
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Oh the game rich people play ...boys will be boys
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Prakash Mody
2 October 2011
12:22 AM
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Really interesting. Pround that Gujarati - NRI - British citizen(?) did this.
Wishing Sanjivbhai achieve his objectives.
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anil k
30 September 2011
04:31 PM
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being lucky enough to have known mr mehta for a few years ,i must say you have described him perfectly....winner through and through i have no doubt he will be successful in this project...i am proud of him and wish him all the best....on a different subject please confirm that mr ducks is not the last shareholder mr mehta bought the shares from as he sounds very sore and arrogant!!!!
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P BALACHANDRAN
27 September 2011
02:32 PM
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An essay well written by Tripathi of this astute Indian trader who took over the company which once ‘colonized’ India and ruled over a fragile Indian society. The write-up also gives an insight into India’s freedom movement, an inspiration to the younger generation.
The container incident exemplifies the sheer grit and determination that Mehta posses. A relentless striver, he deserves a position at the top, the ‘restructured’ East India company take over may just another feather on his cap!
We, as a society should harbor no “hard feelings” against the Company nor the Brits. That’s being mature on our part. We left it long ago and are well on our way in the progressive world. The Americans have forgotten the wounds of 9-11 and so are the South Africans have abandoned their racist ways. Why then, lament over the past. Should we not be proud of the Mehtas among us?
P Balachandran Baltimore (US)
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Beefsaag
24 September 2011
08:58 PM
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LOL, only an overseas Indian, specifically a Gujarati, would do something like this
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sach
6 September 2011
05:04 PM
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Really nice article.
Sanjiv Mehta is a true visionary!
Over time, succeed it will.
But it all depends on how deep his hands reach into his pockets!
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Mr Ducks
6 September 2011
05:03 PM
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Being involved in Retail for over 40 years I cannot ever see this retail outlet in Mayfair ever being a profitable concern .I suggest Mr Metha re studies UK retail and give up and start a supermarket
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Firas
4 September 2011
05:26 AM
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Disgusting.
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Unni K Nair
31 August 2011
11:18 AM
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This acquisition by Sanjiv Mehta of the East India Company is more symbolic than that of Land Rover and Jaguar by the Tata Group. In the era of globalization, the old wounds of colonization are quickly forgotten.
http://uknair.com/
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Amoolya
29 August 2011
02:42 PM
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“So I took one person at a time. I did to them what they did to us: Divide and Rule. In eighteen months, I mopped up all shares.”
Sweet.
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