An Enigma Called Siva

29 04 2008
NRI prowler, deal-maker exraordinaire, serial entrepreneur are labels that are often attached to  C. Sivasankaran or just Siva.
Strangely, there is not much in the  public domain about this maverick  busnessman. For someone, who runs a US$ 2 billion company called Sterling Infotech Group, there is hardly an interview of his in the business media.
 
Would you believe that Siva apparently started off as a  humble fabrication contractor at Madras Refineries ( now CPCL)?
However it was with  Sterling Computers that he first tasted success. Sterling was a business which he bought from Robert Amritraj ( Vijay Amrtiraj’s father). Sterling Computers gained a sizeable marketshare in late 80s when it sold Siva PCs at basement bargain prices.
 

Siva’s name sprung up again when he was involved in the Tamilnad Mercantile Bank (TMB) deal. In a complex deal involving Siva, the Nadar community and the Essar Group, Siva bought and sold significant stakes in TMB and profited greatly.

 
Siva hit the headlines again he secured cellular licences in a few states including Tamil Nadu and Delhi.  He sold the Delhi licence to Essar. He bought the RPG Cellular business and merged it with his company Aircel. Aircel achieved significant scale and success in the South and in 2006 he sold it off to Maxis Telecom for over US $ 1 billion. Aircel is, probably, the only instance of Siva building a sucessfull business from scratch. 
 
Cellphone services were not his only interest in telecom. He also started Dishnet in 1998, an Internet Service Provider based on the DSL technology. During the dotcom boo,  this business achieved some success. He sold it to a Tata group company, VSNL.
 
Siva and Ratan Tata probably came together for the first time during the Dishnet deal. Their friendship is now an open secret. Mr. Tata has publicly acknowledged that Siva is close to the group and that the latter had helped  the group to bring down telecom purchase costs significantly.
The Tata-Siva friendship has led to a few more deals. Siva bought 7 % stake in Tata Teleservices Ltd. He had sold a significant stake in Barista to Tata Coffee which he later bought it back and then sold it to Lavazza, an Italian chain.
 
Apart from the Tata Group, Siva seems to had a close realtionship with the Essar Group in the past. It is hard to fathom though  whether Siva and the Ruias are friends or adversaries now. The TMB and the Delhi cellphone licence deals are , of course,   public testimony to their relationship in the past.
 
Vijay Mallya is another person with whom he has had many a deal. In the 90s, Siva bought a 9 % stake in UB Group through open market purchases and there was even hint of a takeover, but  this never fructified. Later ,  news appeared that Siva had taken over Best and Crompton, a Chennai based engineering company belonging to Mr. Mallya. Whether Best and Crompton shares were traded for Siva’s UB Group stake, is not known.  
 
Siva surely has friends in political circles too. But, you will never see him sharing diases with any politician. Recently one newspaper published from Mumbai suggested that Siva has funded Kalaignar TV, a channel started by Tamilnadu  CM M. Karunanidhi.
 
Siva has expressed his interest in investing and entering media and entertainment business. He had made a statement that he would enter the regional TV business through strategic stakes in regional TV channels. Apart from a 15 % stake in Sahara One, nothing much is publicly known of his media business. 
 
After making a windfall profit though the sale of Aircel, Siva created an investment company called  Siva Ventures Limited. Through this firm he is entering new businesses, through a mix of organic and inorganic growrth strategies. He has acquired a Norwegian shipping company and a wind-farm company in Finland. He has also started greenfield plants to produce ethanol from corn in the USA.
 
Nothing much is known about the other people behind Siva except two of his advisers- Vijay Bhatkar and V Srinivasan. Looks like Siva is a lone ranger, without an organisation behind him.
 
While Chennai remains the headquarters of the Sterling Infotech Group, its businesses span the globe. Siva himself is an NRI, who has been changing his home ever so often. After living briefly in Dubai, he now lives in San Francisco.   
 
Is Siva an industrialist ? In many ways, not. He has definitely managed a few companies for few years, but you can hardly associate any industry with him. He is definitely not an institution builder or a top-notch manager.
 
Is Siva a value investor in the Warren Buffet mould ? Perhaps not.  A look at the TMB or UB Group stock deals would indicate that he is a value investor, but he hardly has a portfolio of high quality companies which he has nurtured over many years. He appears to be an opportunist, who smells deals through his network, rather than by analysing balance sheets.
 
Is Siva a stockmarket wizard ? Maybe yes, maybe no.  No doubt, he is a consummate deal maker. He holds on to his investments till he gets the target value. He held on to his Aircel business for a long time and did not yield to lesser offers. He also does not shy away from selling and buying stakes back, like Barista or TMB. However, he seems to be reluctant in taking any of his company public. Had he been  a stockmarket wizard, he would have understood that lot of value can be unlocked by taking companies public. is he afraid of the  transparency requirements and the scrutiny by shareholders and analysts?
 
Is Siva a venture capitalist who takes big risks in new technologies ? In some ways, yes, in many ways no. His investments in ISP, ethanol and wind energy would indicate he is interested in entering new technologies, but then  how do you explain his huge investment in shipping,  among the oldest  of old economy businesses?
 
Is Siva a dodgy businessman with a shady background ? I’m not sure. He has been in business for over 20 years, which is a fairly long period of time. It is diffcult to survive this long with a dubious track record for that long. His businesses are now in countries which have strong corporate governance rules. He has a friend in Mr Tata, whose sense of ethics and morals are unquestionable.
But, if everything is above board, why is Siva so secretive? ” “Behind every fortune there is a crime ” said Blazac once. Could that be true for  Siva as well?
 
– G. Mohan
 
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2 responses

17 05 2008
Venkat Subramaniam

Mohan bhai you might remember in 1996 the erstwhile TCS Management Consulting division was offered an assignment by Raymond (JK Group) to look at the feasibility of setting up an International Business School.

In that context I had interviewed the Directors of many of the premier B-Schools in India. Professor Khandwala(who was the Director of IIM Ahmedabad then) had mentioned:We produce a lot of successful managers, but if we could produce even one entrepreneur like Dhirubhai Ambani in the coming years, I would consider my tenure as Director to be successful.

Now this was coming from an academician who has contributed substantially to management research. Inspite of management being an applied science the ‘DNA’ of an entrepreneur is still quite hazy.

An entrepreneur whatever be his/her background, has to break the silos within which they exist. This could be the silo of expertise/competency in a specific field or a specific skill.(that’s my assumption) For people with professional qualifications these silos become further strengthened by the alter-egos and recognition attached with their positions/designations. Hence, it is so much more difficult to break.

For an entrepreneur like Siva, perhaps it was easier since he was not carrying the burden of educational qualifications.

Where do we place people like Siva?

If businesses as run by the Tatas and other coprorate houses, can be termed ‘going concerns'(that are expected to remain over a long term) then entrepreneurs like Siva are ‘intermediate value creators’ contributing to these going concerns.

19 05 2008
Tamal

Sometimes it is difficult for us( employees) to see from the viewpoint of b businessman . It all about of different quadrants.

I agree with Venkat that most of the time we, the educated professionals, are victims of locked- in thinking.

A tree bears fruit for a completely different purpose that we look for.

I feel Siva is a creative persons ( like a painter or a musician ) who enjoys to create business and continues to look for a new one.

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