The Moneyman Who Loves Math Economics Time

The Moneyman Who Loves MathShriram Group founder R Thyagarajan bets on math and mathematicians for business success, not that much on B-school grads

:: Sanjay Vijayakumar & V Balasubramanian

    In the nearly four decades of shepherding the Shriram Group, R Thyagarajan, 75, has come to be recognised as an outlier. For long, he has been making a success of used-trucks financing targeted at truck drivers and cleaners, a customer base few others deem creditworthy. His Shriram Group was one of the few non-banking financial companies that survived stringent norms imposed by the Reserve Bank of India (RBI) in late 1990s to control fraud. And he has never been overwhelmed by private equity (PE) — scores of whom have invested in his group companies — while the evidence in other business groups is different. In two years, if his latest prediction is on the dot, Thyagarajan might be able to add one more to this list. And that is: “We will make the biggest profit in the general insurance industry in 2014.” Then, for effect, he says, “No other company can come close.” Why is the usually forecast-shy Thyagarajan so certain about this? “Because,” he says, “I am a mathematician.” The implication being that he has worked out certain things in that business based on math insights that will give him the edge. Thyagarajan, who did his masters in math from the Indian Institute of Statistics more than half-acentury back, now wants to make sure math and mathematicians will play an important role in decision-making in his group going forward. Number Support The broad idea must have been in force for years now. While many top names in India Inc have been donating millions to Ivy League institutions, Thyagarajan and Co has been supporting the Chennai Mathematical Institute and the Hyderabad-based CR Rao Advanced Institute of Mathematics and Statistics. He and his friends have donated close to 10 crore to the former. Plans for donating another 10 crore are on. “Ten years from now,” Thyagarajan says, “we will take 5-6 people from the institute who will be part of our management team.” He also wants to recruit mathematicians for number-crunching skills.     Thyagarajan has now asked the institute to introduce specialisation in applied mathematics. CS Seshadri, director-emeritus, Chennai Mathematical Institute, says, “Thyagarajan’s love for math has been seen all along. His buddies like MS Raghunathan [who heads the IIT-Mumbai's National Centre for Mathematics] have become great mathematicians.” Seshadri goes on to add, “Rajeeva L Karandikar, the director of the Chennai Mathematical Institute, has been advising Thyagarajan on recruitment of statisticians and in analysing business.”     Thyagarajan’s belief is math can help create certain yardsticks, with which decision-making becomes easier. “This isn’t available in Bschools. There thought is half-baked,” he says, giving an example where numbers worked in their favour. “The entire general insurance industry was 100% convinced that commercial vehicle insurance industry is unprofitable. I collected 

information and found it was a good business. I tried to present it to the insurance industry but they said they are not interested.” Now, Shriram makes a good profit on that.     Group director S Natarajan says the group has developed the ability to analyse and solve industry problems. He gives the example of general insurance where settlement time was brought down to two months (compared with the then norm of a year).     “That’s why we don’t listen to credit-rating agencies, we have our own yardsticks,” Thyagarajan says. The key for him is to collect statistical info and then analyse, not arrive at conclusion from existing data, which is the norm. “People just jump to conclusions. Everything should be measured, and there should be objectivity in quantification. I have been trained like that.”     That’s also why he believes he would rather look for talent in Tier II, Tier III towns rather than Bschools. “Talent doesn’t reside in B-schools,” he says. That approach also works because Shriram has never believed in being a big paymaster. “Many of our people who are doing well hadn’t done well academically.” R Duruvasan, for example, an undergraduate, joined the group 34 years back. He went on to head the life insurance business. The Low-Key Boss Years before he became an entrepreneur, Thyagarajan knew about the pitfalls of poorly collected data. While working with New India Assurance, he was amongst the statisticians asked to collect data on an unprofitable line of business. “Looking at the format, I said I will not collect this information because with that information you cannot come to any conclusion.” When the boss was almost pleading with him, Thyagarajan decided to just fill up random, fictitious figures for the study.     Decades later, he doesn’t have the reputation of a go-getting businessman who runs an empire with over 40,000 crore under management and has 6.5 million clients. He’s soft-spoken, his conversation tinged with humour, and works out of a nondescript room in an even more nondescript building.     He sits in one corner of an eight-seat meeting table, almost always attired in a safari suit, with a few files, a diary and a landline being the only things to work with. He doesn’t carry a cellphone. Once, he asked visitors to sit on one side of his worktable, so that he can make do with just one light rather than two.     Thyagarajan says he doesn’t spend more than 100 on his medicines each year and hasn’t had an ECG in 35 years.     His entrepreneurial foray started with the chit funds business, gradually branching out into many other streams of the finance business such as transport finance, SME finance and insurance. He also found enough reasons to invest in non-finance businesses such as contracting, IT and realty while putting monies in a slew of small ventures that deal in everything from guitars to stem cells. “I am always fascinated by people who have failed in entrepreneurship because of lack of money,” says Thyagarajan. “So I support them, because you need people who don’t look at risk. If everybody focuses on risk, nothing will happen.”     HR Srinivasan, vice-chairman and vision holder, Take Solutions, a group company, says, “You can never find him tense or emotional. That is because he is very clear about what he wants. He can argue both ways about a situation and bring out the best in you. But he never enforces his views on others and gives room to try out their own idea.” 

Language of Science One of the recent efforts of the group in which Thyagarajan’s math know-how came in handy was one that created a novel ownership trust structure. The Shriram Ownership Trust, as it is called, was set up to recognise as owners 36 top officials who built the numerous financial businesses of the group. While senior-most members have been given a 2.5% stake each, others have been given a 1% stake.     Until they retire at the age of 60, the trust doesn’t yield them anything. They just have to draw remuneration from their respective companies. Once they turn 60, they immediately get a 20% return on what they are eligible for.     The remaining flows to them over eight years. That still left an unallocated 45% stake. So, the group decided to allocate 20% for future leaders and the remainder 25% was transferred to a new trust that would have as members all the top brass of Shriram’s non-finance businesses.     “I told all the businesses should be valued conservatively when compared to the market value,” Thyagarajan says. “Science is my religion. In 100 years, mathematics will be the language of science. If you do not understand advanced mathematics, you will not be able to understand science,” he says.     “Like man emerged from monkey, mathematician should emerge from man. That is the second evolution.” The quote pretty much sums up the man. Corporate Profile Financial Services: The Group’s financial services businesses manage assets exceeding 40,000 crore, and have 6.5 million clients Has the ability to attract PE money almost at will. None of the business — chit funds, transport finance or SME finance — act in isolation. Thyagarajan always used the strength of one business to develop another business. He calls it the antisilo approach Non-Financial Services: Current revenues of over 3,000 crore in businesses as wide-ranging as EPC, IT and guitar-making 

Corporate Fraud: How It’s Done:: Tina Edwin

Fraud is back in news. And it’s here in all its con-glory. Think secret warehouses, stolen goods, rigged records and conniving men in power. The Adidas scandal has them all: a readymade script for a corporate fraud blockbuster. But according to consulting firm Ernst and Young, just because it has not been in the news doesn’t mean corporate fraud had taken a break. It was always lurking around in lesser headline-worthy ways. In fact, according to the latest E&Y survey, three out of five Indian firms have been victims of fraud in the past year. That might include the one you are working for. The reason companies don’t talk about it is that it shows them in poor light. Who wants stakeholders to know about illicit deals, siphoning off funds and information leaks? But silence doesn’t change the truth. Corporate fraud is on the rise: losses are mounting, the types of con jobs are multiplying and the profile of fraudsters is changing. The new face of fraud has most of India Inc stumped. How do companies prepare for an attack that has no playbook? “It takes as much as 12 months or more to detect a fraud. Companies believed that internal audits and manual process controls are adequate to prevent one,” says Neeta Potnis, senior director and national leader, forensic and dispute services, Deloitte India. Experts insist on strategies and systems that make companies less vulnerable to fraud. But to go one up on the perpetrators, companies must be aware of the different ways of conning. ET on Sundayspoke to forensic and frauds specialists to collate this list of most common threats. And discover that old flimflam and new technology are set to give gumshoes many sleepless nights. Tinkering with Procurement Bills Possible fraudsters: Mostly junior to middle management officials If there is something that tests an employee’s integrity the most, it is a job in the supply chain department. Procurement is seen as one of the most vulnerable areas by companies. Procurement frauds could take the form of kickbacks from a vendor for orders, fake transactions or manipulating of quotations. “Procurement teams get kickbacks to place orders for almost everything, from low-value purchases such as stationary to heavy equipment,” says Arpinder Singh, partner and national director, fraud investigation and dispute services at Ernst and Young. “Instances of fraud always rise when there is a third party touch point because employees get influenced by the opportunity,” says Rohit Mahajan, executive director, forensic services, KPMG. Procurement frauds can involve goods or services. For instance, a company using a labour contractor can inflate the number of workers hired through him. Another way is to bring in a vendor instead of dealing directly with the original supplier or a manufacturer. The vendor marks up the price of supplies and shares a part of the mark-up with the procurement department. Bribing for Special Favours Possible fraudsters: Everyone Most people don’t think twice before paying petty bribes. For many companies, it is inherent in the nature of business they operate in. Employees at all management levels may be involved, including people right at the top. Even the army chief Gen VK Singh was not spared by the representatives of Tatra. While in that instance, bribes were allegedly offered for additional orders for trucks, it can also be 

offered to gain regulatory clearances, to speed up government processes or to win new clients. Petty government officials are regularly bribed to access confidential government papers or competitive information of another company.     “There is significant lack of awareness about some of the anti-corruption and bribery laws in the country and elsewhere,” notes E&Y’s Singh. Companies with foreign exposure can get very badly hurt by charges of bribery because of laws such as the Foreign Corrupt Practices Act in the US. Creating Fictitious Accounts Possible fraudsters: Trusted employees This one’s an old trick: diverting money by opening bank accounts, often in cooperative banks, or by raising false invoices. Employees even conspire with outsiders such as vendors and the security providers to pull it off. This fraud may involve manipulating cash books. Though large companies scrutinise transactions carefully, they are also susceptible to these frauds. Take the case of Wipro. In 2009, the IT major discovered an employee had been transferring money from Wipro’s bank accounts to his personal account during several transactions over a period of three years. “Many times, frauds take place when monitoring controls fail to detect deviations from set processes. Long serving employees who are familiar with the     weaknesses in processes may be involved,” says Deloitte’s Potnis. For instance, in a chemicals company, an old employee who held an important position at a factory located away from the head office was found to be embezzling funds. For years he carried on the fraud using vouchers in the name of regular and     fake suppliers. The cheques issued by the company against these vouchers were encashed at a cooperative bank. The company sniffed a fraud when vendors complained of delayed payments. Fudging Accounts Possible fraudsters: Senior management executives It’s the return of the biggest menace of all. Long ago, family-run companies were known to maintain two set of books of accounts — one for public consumption and another, which gave a true picture of the company’s performance, for the promoters.     Today, there is a new motivation for cooking accounts. “Now that professional managers’ compensation packages are being linked to business and stock performance, the senior management is under high pressure to deliver good results,” says KPMG’s Mahajan. So the temptation to fudge accounts to state higher profits is on the rise. Satyam is a classic example of accounting fraud. More recently, private equity investors Bain Capital and TPG Capital have accused Lilliput Kidswear of accounting fraud. They suspect the company has overstated its sales and profit. There are multiple ways that accounts of a company can be fudged. Revenues that are to accrue in future can be shown as current period’s revenue, fake sales can be registered only to be reversed next year, lower provisions may be made for future liabilities such as gratuity and provident fund and relevant accounting principles may not be fully followed. Stealing Data Possible fraudsters: Everyone As technology makes it easier for ordinary employees to filch sensitive information, cyber crime involving data theft has become one of the top four economic crimes faced by companies. Sectors most vulnerable to the risk include financial services companies, banks, IT/ITeS companies and those creating intellectual property such as pharmaceutical companies. Yet, a PricewaterhouseCoopers survey late last 

year found that senior management does not regularly review the threat of cyber-crime. Data theft can take place at any level. A sales executive taking up a job with competitor may steal confidential sales and marketing data by copying it onto a pen drive or emailing it to a personal email id. An employee in a bank can steal confidential customer information and sell it to third parties and an HR executive can take data on employees’ remuneration to a competitor. Similarly, a scientist or designer can access information on products under development from a company. Tech savvy employees have also been known to hack into companies’ servers to steal strategic data. OTHER FRAUDS There is no way to draw up a comprehensive list of the types of frauds: they are limited only by the imagination of scammers. For instance, tax deducted at source from salaries may not be deposited with the tax department. This type of fraud falls under the regulatory noncompliance category. Another kind of fraud companies now face relates to conflict of interest. For instance, an HR head of a company may run a recruitment agency on the side and hire most of the company employees through his agency. So unless companies build pre-emptive policies and robust detection mechanisms, expect Adidas-like stories to keep coming in.

Rich, Smart but Dodgy?

High-profile incidents including the Rajat Gupta trial and the Dharun Ravi controversy have turned the spotlight on the less flattering side of the Indian American community famed for its doctors, techies and spelling bee champs

:: Sujeet Rajan/NEW YORK

    Corporate greed, insider trading, cyber bullying, fraudulent scams, forced servitude and workforce exploitation. It may seem like election-year subjects up for debate, but a plethora of recent trials, convictions and charges involving Indian Americans, is turning up an ugly side of the community, which may tarnish the till-now impeccable credentials of a group known for being rich, highly educated, and family-oriented.     The just concluded trial of New Jersey college freshman Dharun Ravi divided even the Indian American community on the issue of conservative, closeted parentage, hazards of shielding talk of gay issues at home, fostering a culture where more wealth and education means more privilege in society, the rest be damned.     Ravi’s stoic silence during the course of the trial, where he refused to show remorse for his actions — “anything I say now would sound rehearsed and empty, and nothing I say is going to make people hate me any less,” Ravi told a local newspaper before the verdict — has made it one thing clear to the community: to inculcate in their children from an early age respect and tolerance for people of all classes and backgrounds. Feudal, Close-knit Even as the community is recovering from the Ravi trial, they are under the spotlight in yet another high-profile case of the year currently underway: Rajat Gupta, the former chief of McKinsey & Co and a top philanthropist, is under scrutiny by a jury for insider trading, for passing confidential information to the convicted Galleon hedge fund founder Raj Rajaratnam.     Next week, former McKinsey director Anil Kumar, who has already pleaded guilty to tipping Rajaratnam, is expected to testify in the Gupta case, adding more to the desi twist on Wall Street.

    Gupta and Kumar are among a shockingly high number of Indian Americans on Wall Street, and in medical and business circles, who are being charged for fraudulent practices this year itself: last week, Ameriprise Financial’s fund manager, Reema Shah, pleaded guilty to securities fraud and insider trading charges relating to deals between Yahoo! and Microsoft and a couple of other companies. Scams of Scale And when it comes to garnering notoriety, the Indian Americans seem to have a penchant for the biggest and the baddest deals. In one of the top frauds of all time in the United States, an Indian American couple in New York, Reddy Allen and Dr Padma Allen, were charged last month with raking in over $460 million through a corruption scam involving New York City’s ambitious CityTime project, intended to modernise the municipal payroll system.     A grand jury ruled that more than $600 million of the project’s budget was fraudulent because of an intricate scam run by the

Allens where they paid more than $15 million in kickbacks and hired a bevy of crooked subcontractors, to run an over-billing scam which pumped money into their firm TechnoDyne.     “With success, come anguish. Because when a community seeks to excel itself at all cost then you run the risk of breaking the rule of law,” says Ravi Batra, an attorney based in New York. Maid in Manhattan While these criminal cases involving theft of public money and fraudulent practices are among many such other cases that spring up all over the country, involving people of all ethnic backgrounds and nationalities, it is perhaps the recent cases of alleged abuse of servants at homes that has cast unwanted attention on the community. Indian diplomat Neena Malhotra, a former consul at the Indian consulate in New York, and now based in New Delhi, was judged to have held back pay and committed other abuses to a maid she brought from India. Another high-profile case that is soon going to come up is yet another allegation of forced labour charges against Prabhu Dayal, the Consul General of India in New York, concerning a domestic help brought from India. Rubbished by Dayal and the external affairs ministry in India, the case nevertheless has prompted the Indian Ambassador to the US, Nirupama Rao to call for a review of the policy of providing domestic help to its diplomats abroad, and announcing a “zero-tolerance” policy for abuse of domestic help.     And it’s been four years now, since the infamous case of the Sabhnanis closed, which played endlessly for days on national television. Varsha Sabhnani was sentenced to 11 years in prison and her husband, Mahender Sabhnani, a New York-based businessman who made millions in making perfumes, was sentenced to three and a half years, for charges that included forced labour, conspiracy, involuntary servitude and harbouring aliens, involving two Indonesian female servants.     In the almost 50 years since the immigration floodgates opened in the United States, and skilled workers from India came to carve a path of excellence for the community, Indian Americans are known for their affluence, as the richest community with the most per capita income.     That may not change in the years to come. But perceptions in the US may change if the moral and ethical questions keep coming up. Unflattering stereotyping may become the consequence.     (Global India Newswire)

COURTING TROUBLE: Rajat Gupta (above) and Dharun Ravi

The Socialite Sales Force

Luxury brands are increasingly using a marketing concept tried and tested in the West: A-list socialites as brand conductors. The strategy is as subtle as it is serious. ET on Sundayon how the ‘ladies who lunch’ are becoming the next big thing in luxury marketing

:: Nupur Amarnath

    In the general din of the social circuit, not every buzz is worthy of a second take. But mid-May, when rumours started that a prominent Delhi socialite, Tanisha Mohan, was being considered by Gucci as its Indian brand ambassador, everyone paid attention. Since 2006, the circuit has been waiting for the next Kalyani Saha Chawla — vicepresident, communications and marketing for Christian Dior Couture India. Could Tanisha Mohan — known for her love for luxury and numerous Birkins — have broken the curse of Indian ‘always the host’ socialite? The rumour gained momentum because Mohan was the choice as the co-host for The Gucci Artisan Corner marking the 90th anniversary of the 4.2-billion (in revenue) brand in December last year.     Since then, Mohan might have moved on to other parties and Gucci to other hosts, but the rumour — true or false — raised hopes that the time of hard-working socialite is here. And the Indian socialite might become what the luxury brands call their western counterparts — “conductors” — not the orchestra variety but the transmitter ones. They don’t just wear the brand, they are its face, its muse. They are not movie stars with million-dollar releases in a year, nor do they have their cache of fans. And probably, not so much recall value either. But they work, just as socialites do, to bring in a special ‘crowd’ to the table. Socialite as a Conductor In 2006, when Christian Dior chose Chawla as its spokesperson, everyone was shocked — some secretly jealous. Chawla’s association: to be the face of the brand, be seen in Dior in the right circles, host events attended by the right people and generally hobnob with the circle that she already moves in.     The money details are not clear — people in the circuit and in the luxury industry say its part financial, part goodies. But it might be working. Chawla says, “Dior has done incredibly well with a consistent rise in sales. It is the most visible brand in India with the highest recall value in terms of marketing strategies implemented.”     “Socialites being signed up for a fashion brand is not new, at least not in the West,” says former fashion editor and luxury specialist Sujata Assomull-Sippy. She mentions Armani’s 19-year-old association with British semi-royal and socialite Lady Helen Taylor that started when he designed her wedding gown in 1992. The association ended in 2009.     Taylor, who was also the face for Bulgari, gave a sigh of relief and was glad to give up “her uniform”. Six years hence, Chawla is nowhere close to hanging up her Dior couture.     The ‘Mohan for Gucci’ buzz has engendered new aspirations in the circuit that goes beyond the ‘hostess’ or the grander-sounding luxury consultant tags. “The socialite is becoming more

important in a luxury brand’s marketing strategy as she pulls in the ‘right kind of crowd,” says Priya Sachdev, creative director for TSG International Marketing that has brought brands like YSL, Diane von Furstenberg to India.     The right kind of crowd would mean the preferred customers for them. And all are in: from Dom Pérignon’s associations with designers Abu Jani & Sandeep Khosla to one-off parties hosted in the past by Pernia Qureshi Shah and Queenie Singh to Remy Martin’s branded ‘Cointreauversial’ nights that has its own idea for what makes a socialite.     Then there are sundry jewellery brands and designers who use their little black books to watch brands like Ulysse Nardin and cosmetic brands who got image consultant Chhaya Momaya in Mumbai to consult her on launch soirees. That’s not all, Jimmy Choo, Omega, Kenzo, Corneliani, Panerai have all approached the ladies who lunch for one or more parties. Genesis Luxury, United Spirits, William Grant and Kimaya declined to comment on this trend. Nichevertising Brand consultant and strategist Harish Bijoor of Harish Bijoor Consults loftily terms it “nichevertise vs massvertise”. According to him the luxury brands are not for mass consumption and shouldn’t be mass advertised. The social circuit gives them a fresh channel to reach out to their target audience without any noise. “The socialite model of marketing targets the guest lists minus the hard sell,” he says.     Bijoor says that for luxury brands, sell is a four-letter word — and not just literally and that’s why they aim at buy. “Luxury brands like to be bought, not sold,” he says. “Sell is a top-down strategy which involves an element of ‘shout’ — you asking consumers to consider you. Buy, instead, is a pull-oriented strategy. Luxury brands love pull not push,” he explains. This is ideal for the socialite marketing where the conversation with the brand is more visual and not aural.     That’s why consultants like Momaya and Sharmilla Khanna in Mumbai believe in small, intimate get-togethers centred around the brand and not 200-cover parties. It was in 1998 that Momaya did her first event for La Prairie — the cosmetic and skin-care company. The brand reps contacted her because its database abroad had her down as a frequent buyer.     “I advised them to think small but focussed and got together a set of 26 ladies for a sit- down lunch. Most of them became converts later,” she says. At 50,000 to 3 lakh for a pot of La Prairie cream, it was good advice. Momaya has since spearheaded many luxury launches in Mumbai and is currently working on a jewellery brand to be launched in November.     Her work is not just guest list management. From initial communiques to brand information to place settings, crockery, food and wine/champagne, these ladies have a say in everything — they know what their friends want. Paying the Host A PR executive with a luxury brand in Delhi, who chose to be anonymous, tells us how the Mumbai social circuit has taken this ‘nichevertising’ to a whole new art form. “A brand ambassador like a Bollywood personality has more recall value but they come at a price. Plus a Shah Rukh Khan for Tag Heuer will have a contract dictating how many appearances he can make. These social soirees help to fill the in-between space — not to mention they come cheap,” she says. That’s true provided you call 3-5-lakh tag for the hostess for one party cheap. But Delhi rates are even more “reasonable”, from 75,000 to 1.5 lakh per event. Suhel Seth, managing partner of Counselage, a strategic brand marketing consultancy says, these short-term brand associations happen because luxury brands are a bit marooned and clueless in India. “They tie in with brand ambassadors only so that they can establish the type of consumer they would attract and/or be comfortable with,” he says and adds, “Having said that, many of our so-called

socialites only either look good or are drawn from celebritydom which is why my worry is how meaningful will this association be?” What concerns him more is the whole “socialites on rent” concept. Seth, who has shunned all advances by brands who want him to host parties, says, “In the West, socialites make for good, not great, brand ambassadors only because they invest a lot of time in the brand, rather than a mere party or event association.” But he counts Queenie Singh (who hosted the Paris Hilton party) and Nisha Jamvwal as doing “an excellent job of aligning brands. But apart from these two, I don’t believe India has arrived.” Socialite’s a Bad Word… It’s still early days. Brands are testing the waters. Like Remy Martin that has redefined the word socialite, says Rishabh Suresh, marketing manager, India sub continent, Remy Cointreau. For their Cointreauversial nights, to promote Cointreau, they look for “socially prominent women” — a camouflaged term different from “socialite”, which has become a bad word. In an interview to a news magazine in 1999, Nafisa Ali — socialite-turned-AIDS activist — had lamented: “I hate being called a socialite. It’s an embarrassing, traumatic label.” Socialites — leave alone brands — too want to distance themselves from this tag.     Moët-Hennessey India’s marketing director Gaurav Bhatia mentions how Louis XIV hosted the very first Dom Pérignon soirees in Versailles. “For Moët Hennessy India, these associations could never be a fad. They are relationships that we have cultivated due to the heritage, savoir faire and sheer beauty of our products. In keeping with this, Moët Hennessy India does not partner with socialites,” he says.     Suresh says it’s the ‘social butterfly’ associations that dissuades brands. A top socialite mentions how “not-yet-arrived” socialites call her to wangle one invite. Image consultant and corporate grooming expert Yatan Ahluwalia pulls no stops when he says, “Most socialites are freeloaders.”     He says that in India the Western model of socialite marketing won’t work as the appeal of these ladies is limited — in numbers and region. “A Bangalore socialite might not even be recognised in Delhi or Mumbai. Very few have an appeal that transcends state boundaries,” he says.     Writer Shobhaa De, who incidentally debuted in the literary world with a novel titled Socialite Evenings, doubts the appeal of the so-called socialites to build a brand. “Most of these ladies have time on their manicured hands. They are flattered by the association. It gives them a small edge over social rivals. These ladies do bring a certain cache to the brand, mainly, they are happy to share their contacts — for a price, of course,” she says. The idea is that they host swishy parties, invite their glamourous friends and all the gal pals are happy, they get goody bags as ‘Thank You’ gifts.     But what’s wrong with that, asks event planner and Mumbai socialite Sharmilla Khanna, one of the firsts in the city to start these “friends only” dos. “People in Mumbai don’t attend events, they need a compelling enough reason to come out to a place. One is the person inviting them. And I make sure they get something for their effort,” she says. …No, It Isn’t To Paris Hilton, socialite extraordinaire, goes the credit for developing a space for being a socially networked person. As she would say in her trademark deadpan expression and voice, “That’s hot”. Detractors be damned, you can’t ignore the growing power and influence of the Indian socialite.     “They work better than any brand ambassadors as they are more exclusive, under-exposed

than a film star and connected to the right audience. A film star will endorse a mass market brand today, and another high street brand tomorrow and then a luxury one later,” says fashion writer and columnist Namrata Zakaria. According to her, film stars only work better if they have to connect to the lowest common denominator, not the case in luxury marketing.     The only hitch with the Indian social circuit: lack of young faces. “Anyone who’s anybody with any social standing is over 45,” says a Delhi-based PR consultant.     But Chawla says that if you get the brand fit right, you have your pot of gold. “If the person has the power to get the right people, which should effectively increase clientele and customer relationships, then the association can work effectively. These self-styled luxury consultants, on the other hand, don’t bring anything to the brand except Page 3 exposure,which frankly never translates into sales” she says.     Manish Arora, partner and vice-president, Tecnova India — a brand consultancy that has worked with many luxury brands including LVMH — says that this is the best kind of peer pressure marketing model that there is.     “If you are the sort that’s followed by a group you are an influencer. People will want to follow your style.” Building exclusivity however is inversely proportional to visibility. The more you are seen on the circuit, the less likely are you to land a certain “big contract”.     The serious ones of the lot are now cutting down on their appearances and getting an alternate career, besides being the party girl. The popular choices are: jewellery designer, image consultant, event manager, interior decorator and candle maker. Also a causerati. “You have to have a better reason to be popular than just be popular — brands now look for causes you are associated with and charities you support,” says veteran of the social circuit Devi Cherian. What’s In It for Me? The real problem is the deliverables. “There’s no tangible way to quantify if there’s a direct co-relation between a party and sales,” says Bijoor. Getting the right target segment is considered the benchmark, making it all about guest list management. “You can make it scientific even, with a higher price for the first 20 names and so on,” he says.     “Rarely there’s any sales element attached to the deal or deal on potential clients,” says the PR consultant. But talk about money and most marketing professionals decline to say anything on record. Bijoor hints at “secret contracts”. The favoured expression in the circuit is “friend of the brand”. But as Momaya says, “Who’s a friend today? Even best friends are not for free. It’s a you-scratch-myback world. When film stars can ask for money, why can’t socialites.”     “The deliverables depend on brand to brand and strategy to strategy. The issues crop up because the socialite is not a professional and not able to handle the scale of operations or demands ridiculous amount of money,” says Sachdev. The socialite MO is simple: don’t promise anything, but deliver whatever possible.     Bijoor says the edges will smoothen out — socialites as marketers are a new development here. “Maybe in times to come you will see long-standing brand relationships involving families like Abu Jani and Sandeep Khosla have with the Bachchans. Better yet a luxury brand may align to a ‘royal’ gharana — making them more meaningful relationships,” he says.     Expect lots of experiments, some controversies and many galas before luxury brands sort out their socialite sales force in India.

How it Works The Socialite Model of Marketing ‘I am your friend’: Friend of the Brand Most luxury brands don’t prefer people aligning with them for money. Rationale: it cheapens them because they can’t get people for cash. Instead they get socialites to align with them as ‘friends’ of the brand. Vertu follows this policy as an advertising tagline. Payback: Usually comes camouflaged as free goodies ‘I speak for you’: Brand Spokesperson This is what handling PR and marketing for a brand would be. But luxury branding is unlike everyday PR, it’s more exclusive and restricted. The person is more than a marketing/PR pro but becomes the face of the brand. Payback: Part monetary, part goodies ‘Access my little black book’: Party/Event Host This one makes for short-term associations. Brands come in, seek the guest list management facility of the socialite, demand a certain number and type of people to come in and the remunerations are set accordingly. The deliverables in this are the promised party attendees and as brand strategist Harish Bijoor mentions, “It can become scientific with the A-list of guests coming at a certain price tag followed by the second and the third rung.” Payback: In Delhi the rates are 1-2 lakh a party for the socialite, Mumbai charges 3-5 lakh a party (excludes party planning and event management expenses) ‘I sport you’: Brand Promoter A hidden contract with a brand would mean that you are seen in something from the brand’s latest line at any do you attend — accessories to clothes. But there’s no selling, it’s more of a covert op. However, after 10 appearances people tend to catch on. Payback: Depends on the brand, it can be you get to keep what you wear or you return the stuff and get paid per appearance starting at 30,000     S O U R C E : I N D U S T R Y E S T I M A T E S

The New Kids on the Block Rising stars of the party circuit

NATASHA POONAWALA MARRIED TO ADAR POONAWALA

In the circuit: Natasha and Adar are the party face of Pune-based billionaires. Known for her designer dresses, her derby circuit (the Poonawalas raise horses too) and for persisting with the bouffant fashion

PRERNA GOEL SINGLE In the circuit: Ex-model and socialite has a liking for vintage, limited edition bags from Chanel. Was in the news recently for link-ups with a young Bollywood star

ANU DEWAN MARRIED TO HDIL’S SUNNY DEWAN In the circuit: Known as a sassy dresser. Dewan has one of the best collections of couture outfits in the country from Lanvin and Prada to Chanel. Maybe it’s the HDIL’s continuing association with the Couture Week

HARATHI REDDY REBELLO MARRIED TO MITHUN REBELLO OF FIRST INFRAVENTURES In the circuit: A realestate developer working alongside her husband, Harathi is getting noticed for her pageantwinning looks, fashion magazine wardrobe and PR manager skills

‘DO YOU THINK I’LL BE PRESIDENT?’

This week, a new book on the life and times of the world's most powerful man, hits the stands. Sunday Times brings you exclusive extracts that offer a rare glimpse into Barack Obama’s unseen world — the friends, the romantic relationships, the passions, and the vulnerabilities — that have shaped his story

    Not long after Ann and Maya left, Obama heard from Alexandra McNear, the former Oxy classmate who had enchanted him when she was editing the literary magazine Feast. Alex had always been fond of Barry, as she called him, and “thought he was interesting in a very particular way. He really worked his way through an idea or question, turned it over, looked at it from all sides, and then he came to a precise and elegant conclusion.” She was also physically “attracted to him and thought he had a good sense of humor.” Alex was in New York that summer after her junior year, taking a theater course at New York University and working at a book-packaging company in Lower Manhattan. All she had to do was call; Obama was interested. Her mother’s apartment at 21 East 90th Street and Madison Avenue was an easy walk from the walk-up he shared with Siddiqi. They met at an Italian restaurant on Lexington Avenue. As she recalled the night, “We sat and talked and ate and drank wine. Or at least I drank wine. I think he drank something stronger. It was one of those dark old Italian restaurants that don’t exist in New York anymore. It was the kind of place where they leave you alone. I remember thinking how happy I felt just talking to him, that I could talk to him for hours. We walked slowly back to my apartment on 90th and said goodbye. After that we started spending much more time together” — often spending the night. First it was at his apartment; when her mother left for Nantucket for the summer, they were more often at her place.     For nearly two months, until it was time for her to return to Occidental, they were lovers in Manhattan. Alex remembered that as a summer of walking miles through the city, lingering over meals at restaurants, hanging out at the apartments, visiting art museums, and talking about life. She recalled one intense conversation in particular as they stood outside the Metropolitan Museum of Art. He was obsessed with the concept of choice, she said. Did he have real choices in his life? Did he have free will? How much were his choices circumscribed by his background, his childhood, his socioeconomic situation, the color of his skin, the expectations that others had of him? How did choice influence his present and future? Later, referring back to that discussion, he told Alex that he used the word choice “as a convenient shorthand for the way my past resolves itself . . . not just my past, but the past of my ancestors, the planet, the universe.”     He felt pressure to go with the flow, he said later. “Was I going to give in to what I felt was the gravitational pull of graduate school, getting a degree in international relations and working in the State Department, in the Foreign Service, or working for an international foundation? That

would have been a more obvious path for me given my background.” Then there were the expectations of his mother and grandmother, the two most influential people in his life. He thought they would love for him to follow up Columbia with law school, a clerkship, and a law practice, and culminate his career with a seat on the bench. Is that what he wanted? Did he have other choices? His obsession with the concept of choice, he said, “was a deliberate effort on my part to press the pause button, essentially, and try to orient myself and say, ‘Okay, which way, where am I going?’” THE PAKISTANI FRIENDS During his Columbia days, he discussed his struggle for identity not only with Alex but with a few friends from the Pakistani crowd. One of his acquaintances in that group was Mir Mahboob Mahmood, known to his friends by his nickname, Beenu. Mahmood had attended Karachi Grammar School with Siddiqi and Hamid, studied political theory at Princeton under Sheldon S. Wolin, and was now working as a paralegal in a New York law firm and attending Columbia Law School. An intellectual with a black belt in karate, he enjoyed discussing political theory and literature with Obama in a way that Siddiqi could not. Among this set of Pakistanis, he had the closest ties to his country’s ruling class, and the sophisticated attitudes to match, what one friend called “a privy council feel” that would have impressed Obama. They were never the closest of friends, not like Obama and Chandoo, yet their conversations seemed to bring out Obama’s innermost thoughts and hopes.     Thinking about their New York days together, Mahmood remembered how, “for a period of two or three months” when Obama was living at 94th and First with Siddiqi, Obama “carried and at every opportunity read and reread a fraying copy of Ralph Ellison’s Invisible Man. It was a period during which Barack was struggling deeply within himself to attain his own racial identity, and Invisible Man became a prism for his self-reflection.” There was a riff in that book that Mahmood thought struck close to the bone with Obama. The narrator, an intelligent black man whose skills were invisible to white society, wrote,“America is woven of many strands; I would recognize them and let it so remain. It’s ‘winner take nothing’ that is the great truth of our country or of any country. Life is to be lived, not controlled; and humanity is won by continuing to play in the face of certain defeat.” His friend Barack, Mahmood thought, “took very, very seriously the lifelong challenge of continuing to play in [the] face of certain defeat.”     According to Mahmood, young Barack also took very seriously the channeling of grand ambitions. He mostly kept this side of himself hidden, but revealed it occasionally to the Pakistanis. Wahid Hamid saw it at Occidental, and Mahmood saw it in New York. By his account, they had known each other only a few months when Obama posed this question to him: “Do you think I will be president of the United States?”     What did this mean? “I think it was a very serious question, and clearly, at least in my mind, this was where he was headed,” Mahmood recalled. His answer then: “If America is ready for a black president, you can make it.” HIS PERFECT IDEAL WOMAN Obama was six months out of Columbia when Genevieve Cook came along and engaged him in the deepest romantic relationship of his young life. There had been other girlfriends before her, but none quite like Genevieve. She called him BAH-rruck, with a trill of the r’s. She said that is how he pronounced it himself, at least when talking to her. He was living on the Upper West Side then and working in Midtown in a job that paid the rent but did not inspire him. He was still in a cocoon phase, preparing for his larger cause, wondering about his place, keeping mostly to himself, occasionally hanging out with his Pakistani friends, who partied too much and too hard,

he thought, but were warm and generous and buoyant intellectual company, always willing to debate philosophy and the political issues of the day. Genevieve offered something more. She was three years older than he, born in 1958. She kept a journal, as he did; thought of herself as an observer, as he did; brooded about her identity, as he did; had an energetic, independent, and at times exasperating mother, as he did (though the two women were otherwise quite different); and burned with an idealism to right the wrongs of the world, as he did. She was studying for her master’s degree at Bank Street with the frame of mind that she would “save every black and Hispanic child in New York City.”A few weeks into January 1984 they were seeing each other regularly on Thursday nights and weekends.     They did talk about race quite often, as part of his inner need to find a sense of belonging. She sympathized with and encouraged his search for his identity. If she felt like an outsider, he was a double outsider, racial and crosscultural. He looked black, but was he? At times he confessed to her that “he felt like an imposter. Because he was so white. There was hardly a black bone in his body.” At some point that summer she realized that “in his own quest to resolve his ambivalence about black and white, it became very, very clear to me that he needed to go black. I told him that. I think he felt very encouraged by my absolute conviction that his future lay down the road with a black woman. He doubted there were any black women he would feel truly comfortable with. I would tell him, ‘No, she is out there.’”     Early in Barack’s relationship with Genevieve, he had told her about “his adolescent image of the perfect ideal woman” and how he had searched for her “at the expense of hooking up with available girls.” Who was this ideal woman? In her journals, Genevieve conjured her in her mind, and it was someone other than herself. First: I can’t help thinking that what he would really want, be powerfully drawn to, was a woman, very strong, very upright, a fighter, a laugher, well experienced — a black woman I keep seeing her as. Then: Thing is, I can imagine the kind of woman Barack could really get involved w/, ‘fall in love’ w/ — she looks like that woman I saw running [in] the park – light skinned black woman, close cut hair, strong small body, very pretty, and she would be challenging and vivacious in company. Possibly artistic. Not quite, the future would reveal, but close.     In early December, after one year at B.I., exactly as he had planned, he walked into Lou Celi’s office again, this time for an exit interview. The boss had wondered about Obama all along, mostly because they were opposite types. Celi was wired all day, always on edge, sometimes over the edge, according to some of the employees, and he preferred people as energized as he was. To him, Obama seemed too laid back, not engaged. He liked extroverts “that were go-getters, that were hustlers, that got really excited about their jobs.” Obama, he thought, lacked those qualities and “seemed a bit of a lone wolf.” Celi could not see him as a leader. Not that Obama was difficult; to the contrary, he struck Celi as remarkably even-keeled, with an inner peace and confidence, “very at ease in his own skin.” Some employees “would get uptight, some would cry, some would get angry, some would get nervous,” but Obama was always cool. And that is how he appeared now, in Celi’s office for the last time, explaining why he had decided to leave.     Celi found their conversation confusing at first. He expected that Obama would tell him that he was leaving for another job, or that there would be an offer and a counteroffer, but instead

Obama told him calmly that he had no other job lined up. “He just said he wanted to do something else,” Celi recalled. “I told him — like I told many young people then — it’s important to have a plan. He just seemed not exactly clear of what he wanted to do. I told him he might be making a mistake, leaving a job when he did not have any plans except a vague notion that he maybe would do some public sector work. In my view that was typical Barack. He was like a rolling stone. . . . He had a lot of confidence to just think he could move on and things would work out. . . . He always looked sure of himself. And he always had the same look. There was not great emotion I could see in his expression. It was kind of matter-of-fact.” A PRODUCT OF RANDOMNESS When Obama returned to Chicago from his African sojourn, he brought gifts for Loretta, Yvonne, Margaret, Deacon Dan, and Johnnie, and also for Adam Kellman, Jerry’s son, and Henry Kruglik, Mike’s son. The women of Developing Communities organized a party for him at Chuck Cavallini’s in suburban Midlothian. He seemed to relax, Loretta remembered, with tie off, collar open, shirtsleeves rolled up. A life of leaving and being left had come full circle. In Chicago he had found the place to which he could always return.     The old blue Honda Civic was gone; he had sold it before departing for Europe and Africa. Now he had another car, a used yellow Datsun that cost five hundred dollars. A hole would grow in the floorboard, but the engine was good enough to get him where he had to go. No life could have been more the product of randomness than his. From the heritage of Hussein Onyango, the jadak, and Ruth Armour Dunham, the young suicide victim; from a chance meeting of students in Russian class in Honolulu; from the chaos of peripatetic ancestors; from a childhood in distant Hawaii and more distant Indonesia; from the rootless feelings of a double outsider as a biracial and cross-cultural kid; and after nine years, starting from the moment he reached Occidental and the mainland, of intense introspection, trying to figure things out, to make sense of his life — from all that he had found not only a home but a path, and was driving hard now, toward Harvard Law, a stop on the way to his family’s unimaginable destination, his own el dorado.     ‘Barack Obama: The Making of the Man’ is published by Atlantic and exclusively represented in India by Penguin Books India. Price: Rs 899. Available in bookstores from June 1 THE CHICAGO TRIO: OPRAH, OBAMA, JORDAN     Chicago, not New York, was the place to make it in the mid-1980s. In extraordinary sequence in 1984 and 1985, not long after Harold Washington broke the race barrier as the city’s first black mayor, three young African Americans began new jobs in town. The first to arrive was a television personality who came from Baltimore to host AM Chicago. Within two years she had her own eponymous show, and soon Oprah Winfrey would be one of the richest and most famous people in the world. Next came a basketball player from North Carolina, the first-round draft choice of the NBA’s Chicago Bulls. Four months into his rookie season, a soaring Michael Jordan graced the cover of Sports Illustrated with the headline “A Star Is Born,” and soon enough he also would become one of the most recognizable names and faces on the planet. And last, via New York, came Barack Obama, essentially anonymous and unknown in Chicago except to the fellow who hired him as a community organizer and to a granduncle, Madelyn Dunham’s younger brother Charles Payne, who lived in Hyde Park and worked as a librarian at the University of Chicago

The Punahou School Choom Gang. Choom is a verb that means 'to smoke marijuana'

With his father, Christmas time, 1971

Enjoying a ride, as a toddler in Honolulu

With Genevieve Cook, the “deepest romantic relationship of his young life”

Fellow student Lisa Jack took this picture in a photo session where she described how her model “goes from innocent baby to Jimi Hendrix to a Black Panther in just one roll”