In his fictional work of the Aeneid, the ancient Roman poet Virgil describes how the Greeks treacherously defeated the city of Troy. The Greeks, who could not breach the fort of Troy after a 10-year long siege, pretended to sail away while secretly hiding themselves in a huge wooden horse that were placed at the doorstep of the empire.
The Trojans brought the wooden horse to their city within the fort as a trophy of their victory. As the night fell, the Greeks crept out of the wooden horse and opened the gates of the fort to the Greek army which then destroyed the great city of Troy.
The story bears close resemblance to what Senior Kerkar did to the Tata Group – one of the greatest business empires on earth. After joining the Tata Group’s Indian Hotels Company Limited (IHCL) as an assistant catering manager in 1962, Senior Kerkar rose up the ladders quickly to become its managing director in 1970, under the magnanimous JRD Tata – who allowed his managers full freedom to run the companies.
In the 70s, Kerkar was able to expand the IHCL in a major way to different regions even with little financial support from the Tata Group. By the 1980s, the poorly run IHCL had become a renowned and formidable hospitality brand under the chairmanship of Senior Kerkar who floated different companies under IHCL and struck numerous partnerships with foreign entities.
But Kerkar had his eyes set on elsewhere during the time. Back in 1970s, when Grindlays bank was asked by the British government to dilute its stake in Cox and Kings, the Kerkars cleverly brought enough shares to obtain a majority stake in it.
After that, Senior Kerkar utilised Tata funds to buy these shares from the Kerkar family at huge prices to rake in huge personal profits at the Tatas’ loss. Senior Kerkar didn’t stop there; he then forced the IHCL companies to sell back Cox and Kings shares to his family at meagre prices, causing lakhs of rupees in further loss to the Tatas.
Thus, between 1993 and 1996, the Kerkars consolidated their stake in Cox and Kings and replaced the Tatas as the majority stakeholder in Cox and Kings.
In 1996, Senior Kerkar forced Taj Trade and Travel (TTT), a Taj group company, to enter an agreement with Cox and Kings to give the latter access to TTT counters across the world – which simply means all the Taj hotels worldwide. The agreement was for 25 years with an option to renew it up to 75 years. Thus, he was able to build Cox and Kings at the cost of the Tatas’ business.
In his greed to build an empire on the foundations of lies and deceit, Senior Kerkar set up subsidiaries for Cox and Kings and several offshore companies in tax havens such as the Cayman Islands to siphon off the money from Tatas to these subsidiaries, such as the Cox & Kings Travel and Finance Ltd (CKTFL), that were all under the control of his family.
Kerkar also violated the Foreign Exchange Regulations in striking an agreement between IHCL and Singapore Airlines. The airline had an office in the Taj Mahal Hotel in Mumbai and was asked by Senior Kerkar to pay $4.91 million in security deposit to Taj Hotel’s Hong Kong subsidiary where his son’s associate – ABM Good – had a majority stake.
Instead of the Tatas receiving the money in India, Kerkar stole the money from Hong Kong and kept the whole affair secret and hidden from the authorities.
The heist didn’t stop there; Senior Kerkar also sold off IHCL’s special import licenses to PK’s associate at Cox and Kings at throwaway prices. He also diverted the profits of IHCL to Cox and Kings subsidiaries such as CKTFL.
However, by 1997, it all came to light that Senior Kerkar was expanding his own empire by leeching off IHCL. The Tatas found out that Senior Kerkar was diverting profits from IHCL to a network of suspicious foreign entities, including the Cox and Kings Group of companies which was directly under his family.
The Tatas soon found out the trojan horse inside the empire and was quick to throw him out. Ratan Tata, the incoming scion, made Senior Kerkar to resign and took over as the chairman of IHCL in a board meeting on September 2, 1997.
Although it marked the end of Senior Kerkar’s exploits at the Tata group of companies, it was a defining moment for the Kerkars who would then engage in deceitful ways of doing business for the next two decades