She's The One

A scion of one of India’s most powerful families, 26-year-old Kiran Chhabria has taken the helm of Jumbo Electronics, the flagship of the US$2 billion Jumbo Group, and is already tipped for the top.

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By  Elizabeth Drachman Published  December 5, 2004

Cover Story|~||~||~|Kiran Chhabria likes to get her own way. Long before the interview has even started, she is on the phone to her public relations company, berating them for not having informed her that a photographer would also be present. The 26-year-old director of Jumbo Electronics, and heiress to the family billions, has just returned to the office after horse riding lessons, and isn’t sure she looks her absolute best. “What do you think I pay you for? You should know better,” she screams at them. She eventually calms down and later admits: “I am short tempered. I know I am. The last time I got angry was this morning when my computer didn’t work. How ridiculous is that? The head of Jumbo can’t get her computer to work. It made me really angry. I started throwing things around and just wanted to be left alone.” There is little chance of that right now. The young tycoon has already made a huge mark at the top of the Dubai arm of the electronics giant, and is being tipped to one day run the whole Jumbo empire founded by her late father. If she does, it will be the latest chapter in the Chhabria family story: a real life rags-to-riches soap opera of an immigrant entrepreneur who became a feared power broker in the business world. And like any good soap opera, this one is riddled with intrigue, from allegations of tax evasion to generation-spanning sibling rivalries. The family patriarch, Manohar Rajaram Chhabria, better known as MRC, who died in April 2002, first travelled to Dubai from Mumbai in 1974, a good four years before Kiran was born. He decided to relocate his small Indian electronics store Raja Radio to Dubai in search of growth. Thirty years later, the Jumbo Group is worth US$2 billion. The company’s 30th anniversary coincided last month with the naming of Jumbo chairperson, media-shy Vidya Chhabria in Fortune magazine’s Most Powerful Women in international business list -— for the third consecutive year. “At first, [my mum] was embarrassed to be on the [Fortune] list. She doesn’t like a lot of attention,” says Kiran Chhabria. “But now she checks each year to make sure she made the list again.” It’s a powerful family by any calculation, and Kiran is a young gun storming to the top of it. She only joined the company four years ago as a management trainee, earning less than US$1,000 a month. Today she runs the Dubai electronics arm, and has delivered a 30% increase in growth for the past year. To say she is obsessed with electronics is an understatement: she has a PDA, five laptops, a PlayStation, digital camera, a Nokia communicator, an iPod, an MP3 player and several home entertainment systems. “I love toys. My handbag is always stuffed with toys,” she says excitedly. By now the tempter tantrum has subsided and the strong businesswoman emerges, one who knows what she wants and how to get it. Having been to boarding school in Switzerland, and collected a marketing degree from Boston College, the heiress with a passion for horse riding and poetry is on the right track. “I would like to run the whole company myself ... yes, I would like to run the whole group.” She insists however that she deserves her place in the higher echelons of the Jumbo corporate ladder. “I was under pressure at the start because I didn’t understand the business. Of course, I had to prove myself first. My dad said you can forget a fancy office or big salary. I had in the table in the middle of the open plan office where everybody could see me.” Four years is a long time. Now she holidays in the Himalayas, follows Formula One races and enjoys partying at Dubai’s most exclusive nightclub Trilogy. And she is obviously making more than US$1,000 month. But does she get a kick out of being rich? “You can’t ask me that question because I have money. I can’t say what it would be like without money. And yes, enjoying life is very important. My father never had time to enjoy himself,” she says, before adding: “I like to drive nice cars. I like to live well and have nice holidays. I read that one of the richest guys in the world drives an economy car. Get real! Humility is one thing but if you have money you can enjoy it without flaunting it.” Her lifestyle couldn’t be more different to that of her late father’s when he was founding the group. MRC began his enterprise by trading sugar and other commodities. It took a few years before MRC was able to afford to bring his wife to Dubai — and even longer to bring his two daughters, Kiran’s older sisters, Bhavika and Komal. MRC chose the company name after he flew to Dubai on an Air India jumbo jet. “He was so impressed with the size and the magnitude of that plane that he decided to name his new company Jumbo,” she says. MRC chose to focus on electronics after he formed a partnership with Japanese giant Sony, which had no distributor in the region at the time. And the rest, as they say, is history. Today, the Jumbo Group comprises some 28 companies, 20,000 employees and spans the Middle East and Africa, the Far East, South Asia, Europe, the CIS states and North America. Jumbo Electronics remains the flagship company, but the conglomerate has controlling interests in tyres and tubes, brewing and distilling products, chemicals, machinery and equipment. MRC’s influence on the Jumbo Group of today is apparent in the way his daughter speaks of him and the fact that his image is on every wall of her office. The corporate website has pages of photos, tributes and dedications to the “Takeover Tycoon” who succumbed to a heart attack, after over a decade of living with severe diabetes. MRC, like many self-made men, had an equal number of fans and critics. He was well known for his ruthless style and business savvy. But the Jumbo Group of today is a very different place. With MRC’s wife and daughters in charge, it has become a softer, smarter place. Among the many changes Vidya Chhabria has made in two short years, the most impactful perhaps is her attention to personnel. “When my father walked around the company, people trembled with fear,” says Kiran Chhabria. “They were intimidated. You didn’t know what he was going to say. But with my mum, people want to talk to her; they aren’t afraid. People enjoy meeting her. She is very accessible. She is always asking people how they are, how their families are. She is always telling me to be accessible to employees. She wants me to be a role model. She believes that if you make a bond with your employees, then they will have a stake in making the company a success.” “Mum” made many other changes, too. After taking the reins from her husband, she focused her immediate efforts on human resources. “She cut back on working hours and the work week,” says Chhabria. And the new boss took a more understanding stance when it came to employees’ mistakes, says Chhabria. “My father was very much performance oriented, with a do-your-work-or-get-out kind of attitude. He didn’t have a lot of time for under performers, whereas my mum likes to nurture her top management, and she’s a lot more patient. “With my father, even where his own kids were concerned, if we had done something wrong at work, you would get screamed at in front of the management of the company. With her, she’ll give people second chances. She will understand when a slip-up happens, and she’s good very at building people up,” she adds. “With my dad, he was such a powerful man that employees were scared to come into his line of vision, if he saw you, you didn’t know what he was going to ask.” After taking a newer, more nurturing approach to personnel issues, Vidya Chhabria looked to settle some long-running disputes, although more disputes have arisen. The 56-year-old Chhabria is being credited for having successfully resolved a 20-year long business dispute with archrival UB Group, India’s largest brewer. “She settled a lawsuit with our number-one competitor in India. It was a legal battle that had been going on for years. She finally settled that out of court because she just didn’t want to keep fighting legally,” says Chhabria. That settlement ended what the business press in India had dubbed “the longest running rivalry in Indian corporate history” between the two rival beer and liquor firms. At the heart of the dispute was an old argument between MRC and his former business partner, UB Chairman Vijay Mallya, that had contributed to the estrangement between MRC and his brother, Kishore Rajaram Chhabria. The Indian press wrote that the settlement was the direct result of Vidya Chhabria’s efforts to bury the hatchet between the two companies. Despite her best attempts to quell such disputes, family infighting still persists. Her eldest daughter, Bhavika Godhwani (Kanchan Chhabria), is legally seeking a split in the family assets. The housewife-turned-chairperson is also credited with the US$133 million deal in 2003 with SABMiller. Jumbo sold 50% of the company’s brewing interests to the beer giant, creating a joint venture with the world’s second-largest brewer. “That deal was all mum’s doing,” says Kiran Chhabria. Both Kiran and her older sister Komal hold seats on the joint venture’s board of directors. The business community is reportedly watching closely as the board seat is Kiran Chhabria’s first formal introduction into Jumbo’s assets in India. The 26-year-old is both confident and coy about her role in the company. She says she feels lucky to be working at Jumbo Electronics. “Things were already going well at Jumbo Electronics. I tend to be credited with a lot more than I’ve done… but my father put stuff in place and we’re just milking the cow now, which is not a very hard thing to do,” she says. The young director may be cavalier about being a major part of the team that operates the largest electronics retailer in the region with 23 outlets and 4,000 shoppers on average per day, but her confidence level betrays her coy words. Some might describe the executive’s demeanour as the perfect mix of her father’s powerful presence and her mother’s equanimity. Now it is her operational talent that has kept the company on an even keel after two bad chief operational officer hires. After the second COO left, duties were split between Chhabria and the company’s long-time chief financial officer. It was also Kiran and her sister, Komal, who helped convince their mother to take over the company reins after the sudden death of their father. “He had some health issues, but he was recovering,” says Chhabria. “My father thought he was invincible. He never thought anything would happen to him. For all his planning and strategy for his companies… he never saw beyond himself. So when it came to the company’s strategy, he had plans mapped out through 2010, he just didn’t think ‘what if I’m not there to carry it forward.’ We had never spoken about any contingency plans. “At that point my mum had never even been to the office. She didn’t even know the names of the heads of the companies. It was literally that crazy. My sisters and I had already been working with my dad, and the idea of bypassing us and going straight to the top had never occurred to her. She was quite reluctant at first. But over the past two years I have seen her really change and become a much stronger person.” While Vidya Chhabria has remained mum on the subject of succession, there is no doubt that Kiran Chhabria wants to be the boss. She has been tapped to play a major oversight role in the yet-to-be-announced massive retail restructuring. Jumbo has hired top consultancy firm McKinsey & Co. to perform a market study to target new markets and tailor a new store design. “We just spent a lot of money getting McKinsey to come in and do a study to find out where the Dubai market is going,” she explains. The expansion will begin in about six months, using internal funds. Jumbo, a private company, has considered going public, she says, in order to get funding faster, but “we still feel that capital markets and regulatory environment in the United Arab Emirates need to mature much more.” Not all has been smooth sailing for the holding company, however. While business has been good for the electronics arm, the Indian businesses suffered all through the 1990s. The decade was defined by raids by the Indian income tax authorities, problems with labour unions, and high-level revolts at certain subsidiaries. One of the most infamous exits came from the managing director at Dunlop who is said to have finally stormed off after years of disagreeing with MRC; he was one of five chief executives to have quit the first six years of the 1990s at Dunlop. Today, things are looking better at Dunlop, says Kiran Chhabria. The large-tyre business is “still shut in India as we are still in discussion with labour unions and governments to open the factories,” she says. “However, we are settling the financial liabilities so as to kick-start the operations with a cleaner balance sheet. However, the business for two- and three-wheeler tyres is growing and we have increased our market share over the years.” The family business may not see as many headlines as it did with MRC at the helm, but with improving bottom lines, the patching up of old rifts and expansions, the Jumbo women have their hands full. With Kiran in Dubai and Komal in India, and their mother in charge of it all, the women make a formidable triumvirate that is very likely to exceed their father’s biggest dreams. ||**||

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