Simply Fly

by Capt G R Gopinath

  At about the same time, during 1997–98, the world’s financial market seriously disrupted by the Asian currency crisis. It was like a Tsunami. The value of Asian currencies collapsed against the US dollar overnight. Most countries in the Asian east were affected, especially the so-called Asian tigers. Only Singapore seemed relatively unscathed by the battering. Major companies went bankrupt as a consequence. For companies that had imported heavy equipment from overseas and were servicing the loan in dollar terms, the servicing tranches suddenly rose several times, other terms and conditions remaining unchanged. It was only the dollar conversion rate that was affected. Overnight, businesses became unviable, juggling with their existing overheads and higher loan-servicing rates.

  One consequence of this for Deccan was that among the companies becoming bankrupt were those that had leased helicopters. These helicopters were now grounded. This crisis gave me an idea. Suppose the Japanese leasing company had helicopters in Malaysia, Thailand, and Korea. Assuming that some of these had been grounded, there could be nothing more useless for a helicopter leasing company than to maintain grounded helicopters. I called my friend Mike Robbins for information about grounded helicopters.

  Mike was in India, on his way to Bengaluru and wanted to meet me. We met for a drink at the Taj West End. I updated Mike on the current status of the company. I said we had the land, the licence, and the team in place. A helicopter was all I needed to take off. The political scenario had just about stabilized with Deve Gowda becoming the PM. I asked Mike whether he could speak to the Japanese and tell them, that the political scenario had improved. True, Deve Gowda headed a somewhat messy coalition of MPs, and had had the support of a mere 16 against the 272 necessary for a simple majority

  Deve Gowda as PM had to perform a tough balancing act. Nobody believed he would last for any length of time in office. It was only a question of time.

  Mike Robins got in touch with the Japanese helicopter leasing company from whom I once again received a one line fax. It said: ‘We have decided to give a helicopter to you,’ adding that Mr Douglas Cavanaugh, the president of ITC Leasing, would get in touch with me to finalize the formalities of the contract. We were elated. It seemed as though things were at last falling into place.

  Douglas Cavanaugh called me the next day, and I could make out that he was British. Douglas said he would be coming to meet me. He arrived and checked in at Taj West End. Having told him about my dreams; we spoke about our background and lives.

  Doug had a very unusual background. He had been a British air force pilot. He flew fixed wing aircraft and served in the RAF for twenty years. He was also a helicopter pilot and had undertaken various assignments after he sought release from the RAF, including some for the CIA in Canada and the USA. Those assignments often entailed adventurous flying. This was under the auspices of a company called Evergreen headed by a certain Dell Smith, who I met subsequently when he visited India. Evergreen specialized in offshore flying for oil. The company had another USP: lending its helicopter for clandestine missions for the CIA, targeting illegal trafficking of drugs. The company’s helicopters also carried out missions in Iraq and Iran. Evergreen was in other sectors of aviation too, for instance adapting its Boeing 747s to carry space shuttles. Indeed, the company was pretty much involved in every aspect of aviation.

  Doug had a reputation of being capable of a variety of covert and overt flying operations. He used that to his entrepreneurial advantage and was a walking encyclopedia of aviation.

  He recounted his story. He had flown as a mercenary in various parts of the world: in Oman, the Middle East, and Papua New Guinea. He had ferried aircraft, flown offshore for oil prospectors, and had flown African rulers. He was eclectic in the best sense of the term. Doug later worked as sales manager for Eurocopter Helicopters. He had flown in Hong Kong and married a Chinese girl. Like other white men, having married a Chinese girl, he stayed back and rarely visited the West. There is a large expatriate community in Hong Kong, Singapore, and Thailand of westerners who married local women and settled. Chinese women, I learnt from talking to the expatriates, made good housewives and took care of husband and children. Western women, they confided, tended to be domineering and independent-spirited. For Chinese women, family was their first priority. That explained why Doug had stayed back in Singapore.

  On the first day, before Doug and I spoke about our individual lives and families, Doug said, ‘Captain Gopi, I have had hundreds of letters from Indian entrepreneurs. You are the first who has everything to take off. Many people have wanted a helicopter. Some had money but no plan, nor people, nor vision, nor a road map. You are the first I have met who has a team, fire in the belly, and a clear idea of what you want to do. You have pilots, engineers, land, and licence. I am confident we will together make this work.’

  His words were like a balm and brought solace. I saw what Doug meant. I had everything except a helicopter. If it were the other way round I would have been putting the cart before the horse; I would not have been sufficiently credible. I realized that the Japanese had also looked for my commitment and a roadmap. I saw people who got into this field quit in two or three years because they got the money or helicopter before setting up their company and team.

  Doug and I met again at ten the following morning. Doug had no assistance; he was a one-man army with a laptop. Everything that he needed to know about leasing and aviation was on his laptop. He had no lawyer, no secretary, and no chartered accountant. This leanness seemed to add to his efficiency: his depth of knowledge amazed me. It took us three hours to hammer out the lease rental and the financial terms.

  My homework had suggested that helicopter lease rentals across the world were 1 per cent of the cost of the machine. I began at 0.6 per cent. I told Doug, ‘It is in your interest that I succeed. It is not one helicopter. It is the first.’ I told him about the debt trap created by local money-lenders in India in which I had myself been once or twice enmeshed.

  I related stories of how money-lenders kill the businesses they fund. Doug was amused. I made it quite clear that I wanted the project to be sustainable, and I would leave that part to him to attend to, in such a way that I would not need the assistance of a lawyer or accountant or both. Once we shook hands, I called Mohan Kumar over to West End. He had some issue with taxes and that was smoothened out. In the end we had a fifty-page document: the contract.

  I usually read all agreements and contracts. Regardless of how good a lawyer you have, it is better you read it yourself, word by word. What you don’t understand you ask to be explained to you. A trained eye looks at it in a trained way. You have a fresh eye and that helps. You can even overrule the lawyer or consultant. If you leave everything to others, things will never get closed. Whenever I took charge I never had a single instance of litigation. Deals worth millions of dollars never gave rise to any legal wrangles, while cases of joint ventures and partnerships went through huge legal scrutiny and litigation when the relationship was based merely on legal documentation, as if that was the natural outcome. Relationships forged by us on the basis of mutual trust, goodwill, and common sense, invariably worked.

  The following day Mohan and I sat together and ironed out the burrs and edges relating to double taxation. Doug got on the phone and talked to his people. I was keen to close and seal the contract, fearing that any further delay in execution would prevent the company from taking off. There were many things at stake. I could lose team members, the political climate could worsen, and infrastructure issues could crop-up, and on the like.

  Within each of us there is an inner compass. It points to the final fact beyond which analysis cannot take you. You need to draw on that inner resource and follow it. ‘Fine, let me take the plunge,’ you must be willing to say. That will win the day for you, because even with the most foolproof document, you may lose the deal. Shakespeare said, ‘Indecision is in itself grief.’ One remembers in this context, what Brutus says in Shakespeare’s play Julius Caesar:
>
  There is a tide in the affairs of men.

  Which, taken at the flood, leads on to fortune;

  Omitted, all the voyage of their life

  Is bound in shallows and in miseries.

  On such a full sea are we now afloat,

  And we must take the current when it serves,

  Or lose our ventures.

  I sensed this tide in the life of Deccan, in Sam’s life and mine. Catch the tide I must. I took a call and said, ‘Doug let’s shake hands.’ We signed the documents.

  6

  If you wish to advance into the infinite, explore the finite in all directions.

  —Johann Wolfgang Goethe

  Acquiring a Helicopter

  I

  TC Leasing had leased helicopters around the world. Doug said he would give me either the one stationed in Singapore or Kathmandu. We now had everything to launch the company: the lease contract for a helicopter, land allotment within an airport to operate the helicopter, a complete team of pilots, engineers, and technicians to fly the helicopter, and most important of all, the treasured licence from the government. What we still didn’t have was the money to launch the business! It had taken us two-and-a-half years to get here and all the money we had, about Rs 20,00,000–Rs 10,00,000 each from Sam and me—had already been spent. We were now closely poised for take-off but it suddenly dawned on me that if we didn’t get the funding in the next two months, the team and the dream would dissipate like the fortuitous monsoon cloud because the licences would lapse, and it would be a Himalayan task to start all over again!

  While Sam got busy getting the technical details ready for the commercial licence, Mohan and I teamed up in the hunt for the so far elusive golden stag. Both of us were fully aware that the sand in the hour glass was rapidly depleting!

  One day an angel appeared on the horizon! Mohan suggested that as it was now almost certain that no bank would invest in this project, I should consider meeting an old friend of his. Mohan had spoken to his friend about my helicopter project; the friend was keen to meet me and ready to invest. Mohan’s friend’s name was S.N. Ladhani, a Sindhi businessman who owned the largest Coca Cola bottling unit in India. Sindhi businessmen are shrewd investors. Some of the astutest businessmen in the country are Sindhis, Gujaratis, and Marwaris. While the Sindhis and Gujaratis, besides setting up their businesses in the major cities across India, also ventured overseas to set up business colonies, the Marwaris remained largely rooted to Indian soil, penetrating the farthest corners of the country. They command a presence in the remotest taluq headquarters and even at the southernmost tip of India.

  They once owned 90 per cent of the business operations in the country. The Sindhis, like the rest, had a yen for money and were like homing pigeons. I admired them and felt it would be good to have a Sindhi investor in my business to keep a check on my evangelical zeal. I also knew that they could guide me instinctively, without the trappings of detailed market research, balance sheets, analysis and counter-analysis. I also clearly needed someone who could advance money when I asked for it. I remembered the advice of Balakrishna Achar, my accountant in Hassan, about how to choose a business partner. I asked Mohan only two questions. ‘Is the prospective investor a good man?’ ‘Is he someone who can identify himself with my dreams?’ Mohan answered in the affirmative to both questions, and also added that Ladhani would be a good business partner.

  Mohan had known Ladhani for fifteen years. He described him as a tough but a good man with empathy for others. Like all Sindhi fathers, he treated the money given to his sons as a loan and expected interest on the return. Timely interest payment was a barometer and a monitoring tool. If his son failed to pay interest on time, it meant that he was not doing well in life; needed to be counselled and perhaps warned. Sindhis believed in nurturing values such as fiscal discipline and respect for money in their offspring.

  I found Ladhani to be a fascinating man in his own way. He had a harrowing tale to tell about his past. He had suffered the grief and trauma of Partition. He and his parents fled the persecution in Pakistan, and after moving from place to place in India, had for a while settled down in Ayodhya. He was only eight years old at the time. Under the most trying circumstances, Ladhani, like many others who shared his difficult destiny, took up small business contracts in remote parts of UP and Bihar. He was only fourteen when he began his businesses. He gradually rose through hard work and perseverance in the face of odds to become a giant in his line of business in India. He had launched small, soft-drink bottling plants in Bengaluru and gradually become the largest bottler of Thums Up. When Coca Cola bought over Thums Up, they offered him a large compensation in return for his bottling company in Bengaluru. They also gave him the job of setting up a bottling plant in Faizabad in UP.

  Ladhani’s story is akin to those of many like him who fled Pakistan during Partition and who, persevering and, picking up what came their way without complaint, went on to rise to positions of wealth and prestige in society. One does not need to read ‘How-to’ books, routinely churned out by the American publishing industry, to learn how to make a success of one’s life. It is sufficient to sit with people like Ladhani and listen to their life stories. Their tales are hair-raising, dramatic, and compelling. They are tales of courage, resilience, sheer dogged persistence and optimism in the midst of darkness. Hidden under layers and folds—in these tales of boldness, in the face of adversity are all the management and human resource development tips that no ‘How-to’ book will ever tell.

  Ladhani maintained strict discipline in the handling of money. He once told me, ‘Main bukhar bhi free mein nahin deta hoon.’ (‘I don’t give away even a fever for free’). The Americans say it differently: ‘There is no such thing as a free lunch.’ I liked that attitude, but I was also aware that the Sindhi rate of interest could kill a business. Mohan advised me not to give away equity too easily, because that might dilute my equity and erode my prerogative to steer the company. We decided that I would give Ladhani a small equity and negotiate a large debt at a reasonable rate of interest. I planned to offer him a larger equity stake as the company grew.

  I met Ladhani and took an instinctive liking for him. Soon, the relationship strengthened, took on a different hue, and we were almost like two brothers. I patiently told him what had by then become standard pitch. I told him the story of the helicopter company and its business potential for India. I reeled out statistics. He understood numbers. Coca Cola was an American company and he dealt with numbers all the time. He saw the analogy between Coca Cola consumption in America and its consumption in India and understood the tremendous significance a small increase in per capita consumption in India had for the business. The per capita consumption in 1995 was 120–30 bottles in the US and about two or three in India. By increasing that figure to five or six per capita would result in an enormous increase in the total production and consumption volumes, because India’s population was four times that of the US, resulting in huge sales figures. Ladhani got my point instinctively. India had only a few helicopters. There was immense potential for the deployment of helicopters in mining, construction, oil exploration, and tourism. He saw there was a great future ahead and agreed rightaway.

  We got down to negotiating the deal. He agreed to take 10 per cent equity at a capital infusion of Rs 21,00,000. Ladhani made an interesting statement. He said, ‘The faster you run, the more money I’ll put into your venture.’ We agreed broadly that when I needed money he would fund me on the principle that the amount would be paid back with interest. It was an important moment for the company, which I believe was born in flesh and blood, that very day! I now realized why there exists a term in American business parlance, called ‘angel investor’: Ladhani had come to me in the form of an angel and I was even better pleased to discover at a later date that Ladhani’s rate of interest, although much higher than the bank’s rate, was much lower than the standard Sindhi rate of interest!

  Vishnu Rawal was at the time
in Macau, flying for a Chinese company. Macau was still a Portuguese protectorate. Portugal had bought the island on a 150-year lease from China and the period was drawing to a close. Macau followed a laissez-faire form of economy under the Portuguese, as Hong Kong had done under the British. Macau, however, more laid back and fun-loving than Hong Kong, was an hour’s boat ride to the west, and focused on the fun and leisure industry with hospitality and casinos as its principle driving forces. The country’s laid back economy was a well-planned strategy of the Portuguese. The island did not become a global source of capital like Hong Kong but built a string of gambling houses and casinos surrounded by nightclubs and restaurants. Stanley Ho, the eighty-year-old Chinese strongman of Macau, controlled eighty per cent of its casinos. He owned four helicopters which shuttled between Macau and Hong Kong, ferrying high-profile tourist-gamblers. Vishnu called me one day and offered to chip in by taking some equity. His CEO too wanted to invest a larger amount and take equity.

  Kennichi Miyagawa, his CEO, a Japanese by birth and now a US citizen, had previously been a helicopter pilot with the US Air Force. I thought it was good to have a Japanese in the company. It would be useful in dealing with the Japanese leasing company for helicopters, the only one in the world to offer me a helicopter on lease after a two-and-a-half-year search. It would also lend a lot of credibility to a start-up company like ours.

  Miyagawa called me up and said, ‘I don’t need to see you. Vishnu has spoken for you and has inspired confidence in your venture. I do business on trust. I can give you $100,000.’ I discussed this with Mohan Kumar. We concurred that the $100,000, KSIIDC’s small contribution, Vishnu’s money, and Ladhani’s tap should now enable us to kick off! When finally the funding was in place, I realized the truth in the saying, ‘When you have an iron will and an indomitable spirit, the gods themselves join in the combat and the universe conspires to help you succeed!’