Blasé Capital blasts from past

A company never dies. Ok, let us rephrase it. It is rare for a company to die. It goes bankrupt. It ceases operations. It vanishes from the public eye. But it lingers on, like a ghost or a spirit, wandering the corporate graveyards, in search of a revival, forever optimistic that someday the fortunes will change, as they did decades or centuries ago. The East India Company (EIC) was in action for 175 years. For more than 150 years it was kicking and screaming its way to glory. Then, it was dissolved. It did not die. From 1874 to 2010, it lay in a coma, as if paralysed by the swift changes in global business, and technology. It rose from the ashes, a British-Indian bought the rights to use the name, and used it for trading products. Quite an irony. EIC ruled India for a century (1757 to 1857). It was the largest global trading firm. An Indian trader purchased it in this century. But EIC is bankrupt again with debts nearer to a million pounds to the owner, employees, and in taxes.

A debt never dies. Ok, let us rephrase it. It is rare for a debt to die. It may be forgotten. It may be forgiven. It may be buried under personal, bureaucratic, or business documents. In the modern era, it may be lost in the silent ‘noise’ of vast amounts of online data. Yet, it lingers on, like a burden around the necks of the generations that live after the original borrower has turned to dust. The remains and ashes of the loan may be strewn around the ground, or swallowed by the seas. But it stays, forever optimistic that one day someone somewhere will pay it, even if the lender has forgotten about it due to the opaque memory of time. In Madhya Pradesh, the grandson of the late Seth Jumma Lal Ruthia, a trader in cloth and grain at the beginning of the last century, claims that the dead Seth gave a loan of 35,000 pounds (more than INR 40,00,000 today) to the Indian British empire during World War I, and the amount was never paid. Now, the grandson wants Britain to pay it back, with interest, which may amount to crores of rupees.

When Sanjiv Mehta started the process to buy the shares in EIC from the owners, the idea was to restart it as a trading (wholesale firm). Mehta opened a 2,000 sq ft luxury store in Mayfair, and sold premium tea, spices, chocolates, and confectionery. One is not sure if the new owner understood the incongruity, or even the absurdness. Maybe he did, and this was his way to announce a marked sarcasm. For centuries, the EIC, and then Britain expanded the ‘Empire’ based on global trading in spices (Asia), tea (and opium; China), and sugar (West Indies and the US). EIC was an aggressive mercantilist, a naked user of the military, and believed in the brutal force of business. Mehta said in a 2017 interview that his EIC is about compassion. The sale of sweets, tea, and spices created an empathy, an emotional link between the new EIC, and its British buyers (who bought Indian goods earlier). Sadly, Mehta’s EIC was as bad, this time with employees and government. The old EIC counted bodies and wealth. The new one, dues and debt.

In the case of the Madhya Pradesh Seth, local British officials, strapped for cash during the war, asked for money, and documented the loan. The lender died in 1937, two decades after the loan, and everything seemed forgotten after India attained independence in 1947. The loan documents passed on to Seth's son, and thereafter to the grandson. The matter still seemed to be on the deathbed, if not dead. However, in the recent past, the issue cropped up during family discussions. Suddenly, the dead, or nearly-dead, rose from the bed, and gratefully asked if the money could be recovered. Now, the grandson intends to send a legal notice to the British firm. The loan was in the form of war loan bonds, and Britain had earlier stated that it would pay back the war debt. “This is not about money, but about justice and history,” claims the grandson. Well, like the taking over of EIC by an Indian was not about money, but history, and moral justice.

One wonders about those quotes about history. Here is one: ‘Those who do remember the past are condemned to repeat it.” Mehta remembered the past. Indeed, his actions were prompted by history. Yet, in some unique manner, history repeated itself, as another bankrupt firm, leaving behind a trail of the dead and burdened. In the modern world, everything is fast, and crunched, or zipped. So, what the old EIC faced over 275 years, happened in less than two decades. Here is another quote: “History repeats itself, first as tragedy, second as farce.” In some ways, the payment to Seth was a tragedy. In any era, 35,000 pounds is not a small deal. The British need to pay. But, in some ways, without being judgmental or sarcastic, one can claim that there is just a whiff of a farce in asking for a payment after a century.