Investment because of Nehru, Loss because of Indira
(A humble translation of the original article by Sri S.Gurumurthy , as it had appeared in Thuglak Tamil Magazine) —
Indira had an innate authoritarian mindset to crush those who oppose her. This was realized by Kamaraj & others, when congress got split. Not only that, but she was considering the people, who were not supporting her as enemy; In addition to that, Goenka was the first to discover that Indira had the tendency to crush independent journalists also. That is why he decided to expose the real face of Indira. It was not an easy decision. It became a do-or-die battle for both. In that battle, Goenka had put himself, his family, all his wealth, his lifetime achievements like Indian Express newspapers in the front. All the vernacular editions of gigantic Indian express group like Tamil, Telugu, Kannada, Marathi, Gujarathi, Hindi were exposing the wrong-doing business people, politics and Goenka was a night-mare to them. With the support of fearless Goenka, all the vernacular editions editors were functioning very boldly. It will not be an exaggeration, if we say that Goenka play the role of story writer-dialogue writer-director of the Indian politics between 1969–1977. Let us see those happenings briefly.
Indira’s vicious attack
When Goenka-Indira clash started, Express group had many finance related challenges. Before the congress split, banks were nationalized and Indira was aware that by stopping the flow of funds to Goenka from the banks, his group can be driven to bankruptcy. In-spite of knowing that and the associated grave threats, Goenka wanted to oppose the despotic Indira; He started opposing her more vigorously through his journals. On the other hand, there were investments to the tune of Rs. 40 crores, that cannot be en-cashed quickly. Among them, to take over the management, he had invested in Indian iron & steel company (IISCO) of 25% of the total holdings of shares (worth of Rs 25 crores). To destroy the Express group, Indira had started targeting that holding.
With the help of 34% of holdings held by the Govt financial institutions, she had made sure that the management did not go in the hands of Goenka. The interest was piling up on the loan that Goenka had taken to buy those shares. Due to that, he was forced to sell his shares at a cheaper price. In 1971, he had incurred a loss of Rs. 15 crores. Today, it may look like a small amount. But, if he had invested that amount in his favourite yellow/silvery metal, today, the will be valued at thousands of crores. Then, Gold’s price was Rs.7/gram. Today it is Rs.4500. In 1970, the land area of 1 square feet was costing Rs.70 is valued at Rs.54,000, today. If Goenka had invested Rs.15 crores in gold, its value will be Rs. 12,500 crores. Otherwise, the investment in land will be costing Rs. 19,000+ crores.That vicious/under-the-belly attack by Indira, had weakened IE’s financial position and its impact is felt even today. Goenka, the person-par-excellence when it comes to investment explained the reason behind his investment in IISCO shares.
Big investment made because of Nehru and Heavy loss incurred because of Indira
“Guru, I had invested in land, gold, stock market and earned my riches. The gold market would tremble upon seeing my investment. Land & Gold will not disappoint. This, he would repeat regularly and made me to invest in land. I considered myself an expert in finance matters and would get ashamed, when he unraveled his investment strategies. “ You are asking me to invest in gold & land; whereas, you had invested your money in IISCO shares in 1969. What was the reason, Ramnath ji”? He sighed and replied, “Yeah, I lost all my wealth in the journal industry”. It was a shock to me. “Guru, I invested in IISCO shares, because of my friend, Jawaharlal Nehru”.
Pren Mukherjee was managing IISCO like his house assets. He had a very minimal holding in that. Through a crafty deal, a trust owned by him was holding 29% of the share-holdings. With the support of the trust, he took over the management of IISCO. Govt financial institutions were having 34% of the the shares and remaining was with the general investors. In 1962, when Goenka had approached Pren Mukherjee to raise donation for Congress, he abused Congress & Nehru and mentioned that he would not donate a single paise. An infuriated Goenka briefed Nehru.
Goenka said, “Through fake holdings, Pren Mukherjee was owning the company. If you want, you can ask someone to buy significant amount of shares from public and take the help of Govt financial institutions to oust him”. Then, Nehru replied, “if it is possible, please do it”.That is how, Goenka got into that risky investment. From 1963, he started buying accumulated IISCO shares and by 1969, he secured it to the level of 25%. Without the support of Indira, he would not get IISCO and if he does not get IISCO then his investments would get wasted. Since Indira was opposing, he could not get into IISCO management. He wants to oppose Indira at the cost of losing his investments.
Politics of opposing Indira
Since she was not able to act in an authoritarian manner due to the presence of many tall leaders, she broke it into two — Syndicate congress vs Indira congress (Indicate). She also sidelined the. She was in touch with Soviet-Russia from Nehru’s period. In order to establish a new congress, she had started spreading socialist propaganda with the sole aim of selling fake promises.
Firstly, she stopped & snatched all the subsidies, titles given to the princely states that was promised by Sardar Patel to integrate and later legitimized by the constitution. She changed the constitution and unjustly canceled all of them. When it was opposed by syndicate congress, Jansangh etc, she branded them rich people’s parties and sidelined them. When the banks were nationalized that was opposed by Kamaraj & other leaders, she branded them as mercenaries of business houses. DMK, communist parties were supporting her.
In 1971 parliamentary elections, she enticed people by saying that “Let’s get rid of poverty” and claimed further that, “ I am trying to get rid of poverty and these people are trying to get rid of me”. By diverting people’s attention with false promises, she had defeated the combination of syndicate congress, Jansangh and attained major victory. If he does not enter direct politics, Goenka thought, Indira may finish him off; Hence, he got elected as an independent and entered lok sabha.
After the 1971 elections, because of her bold moves, India attained victory in the Bangladesh war and improved Indira’s image. With the victory and improved image, she acquired more authority by amending the constitution with the help of communists. In a major landmark judgement, the Supreme court had rubbished her by reversing the decisions saying that , “Basic structure of constitution cannot be amended”. To take revenge on them, immediately after the verdict was passed, within an hour, she sidelined 3 senior most judges of the supreme court and made the 4th judge in the seniority list as the Chief Justice of Supreme court. After this insult, the 3 senior most judges of the Supreme court resigned and the downfall of the this body, started.
Indira vs Goenka — attack, counter attack
Since 1969, IE group and Goenka were subjected to many crises by Indira’s Govt. Then, 3/4th of the advertisement in the newspapers would come from the Govt. The advertisements that were coming to Indian Express group were stopped or reduced. CBI officials had foisted fake cases on Goenka’s family and office executives. Punjab National Bank had stopped the usual line of credit that was used to run the newspaper operations. In 1950s, PNB was saved by Goenka (see the post script section). The vernacular newspapers of IE group continued their fight against Indira and opposed her tooth-and-nail.
Sanjay Gandhi’s Maruthi factory scam, Naharwala scandal and other scams were exposed by Goenka. Due to that, Indira’s fame that reached its zenith in 1971, started falling down. Her fame and authority started getting diminished. In December 1973, the students of Gujarat started a mass movement against the corruption ridden Congress. The state govt lost its power in Mar, 1974. Immediately, another massive students movement was started in Bihar. It was led by JP, Nanaji Deshmukh, Ramdhari singh dinkar, Goenka and others. It became a huge danger for Indira (documented in the 12th chapter of this series).
Because of the attack effected by Goenka, without mentioning his name, Indira started attacking him by claiming in the public rallies that Goenka had approached her to stop the investigations against him. Goenka wrote back a stinging letter to Indira saying, “ Indirectly, you are encouraging the govt officials to turn against me. I have faith in God. In the courts and people’s court, I would prove my innocence”. Then, the PMO office retreated back by writing back that she was naming you or accusing you. After that, the govt was spreading fake news against Goenka. On 31st Aug, 2nd Sep 1974, Goenka wrote letters to Indira seeking explanation and she kept quiet. Other than Goenka, no body had the guts to fight against the despotic Indira and forcing her to retreat. Likewise, the battle between two of them continued, sometimes discreetly and sometimes brazenly. Because of 3 major happenings in 1974 that had upset her, on 25th June, to save her position & power, she had implemented National emergency in the midnight.
PNB saved by Goenka
From 1960–64, Goenka was the chairman of PNB. Then, due to fake news, there was a run on the bank by the depositors. The bank was about to collapse. It was the weekend and banks were closed. He had approached Nehru and asked him, “If RBI can lend rs. 50 crores, I would be able to manage the situation. Then, I will advertise that the bank would be kept open in the week end and people can come to claim their deposit back. This would help to restore the confidence among depositors. But, RBI would give the money, only, if you advise them”. Nehru spoke to RBI and Goenka continued with his campaign. None/not many had withdrawn their deposits. The financial crisis blew over. PNB honoured him by placing his portrait in the board room. This was narrated to me by Goenka, proudly.