Monday, May 23, 2022
Outlook.com
peerless

Red 'n Black

The finance company's revival from near-bankruptcy is one of corporate India's most remarkable stories

Red 'n Black
Swapan Nayak
Red 'n Black
outlookindia.com
-0001-11-30T00:00:00+05:53

As Jyoti Basu realised, there were lakhs of middle- and lower-class Bengalis in rural and semi-urban areas who had invested their life savings in Peerless. In addition, half of Peerless agents (who were also investors) came from among village school teachers, who formed an integral part of the party's cadre. So, if all these people lost their money, the CPI(M) could end up alienating a sizeable chunk of its vote bank. The Communist leaders also remembered a precedent: a few years ago when a smaller finance company had similarly gone bust, the middle class had sought its revenge by making sure that the then state finance minister, Ashoke Mitra, lost his seat.

It was this desperation that forced Basu to seek the advice of Manmohan Singh, the then Union finance minister who, as the iconic initiator of the Congress' liberalisation programme, was no particular favourite of the CPI(M). The two approached D.N. Ghosh, who had earlier worked in companies like L&T, to set the Peerless—and, hopefully, the CPI(M)'s— house in order and prevent it from going bust. Although, in retrospect, Ghosh says he accepted the company's chairmanship "against my better judgement", he created history. In fact, the resurgence of Peerless is one of the most remarkable stories in India's corporate history.

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