Mumbai: In an interview, Essel Group chairman Subhash Chandra talks about his likely retirement, and succession plans for the group. Chandra was joined in the chat by his son Punit Goenka, his first interview ever. Edited excerpts:
OK, so now let us in on the secret which even both of them (Punit and Amit Goenka) claim they have no idea about. What is the succession plan? I believe a succession plan has been in place for a while now but nobody seems to know about it, not even generation next?
Subhash Chandra: There is no plan. Succession is not planned; to my mind, it’s a process; it’s a process when somebody takes over some responsibility. As a parent you give them more; when they take more, you keep giving them more, and slowly and gradually you hand over.
So you are saying there is a process, it is not an event. So what are the parameters that you have laid out? How do you actually see or evaluate whether somebody is eligible now to go from step 1 to step 2 or step 3 and actually take over from you?
Global approach: Essel Group chairman Subhash Chandra. Zee Entertainment, a group firm, plans to expand overseas by providing local content rather than focusing on the local South Asian population. Madhu Kapparath/Mint
Chandra: There are no steps. As I said, there are no steps. It’s a process.
And if you are handling...even if I am handling something, if I make mistakes, I have to retract back and look at myself. So I also hand over things to the right people. It’s not only that the generation next has to do it, but when they take responsibility, they perform that responsibility well, they get more. Then they get more and when they get more and eventually then I have nothing else to give them. So they run their lives. That’s succession planning.
Let me ask you a direct question—who takes over as chairman?
Chandra: I don’t know yet.
You don’t know yet...but tell me...?
Chandra: No, in the sense that we have...see, it’s like political parties you are seeing.
You keep changing your mind?
Chandra: No, no, there is no changing of the mind. No changing of mind. I mean there is no need for me to say at the moment.
But you have decided?
Chandra: I think we all know.
Is it from generation next or will the next chairman be from your generation?
Chandra: The succession plan has to be next generation.
Next generation? So is it from Punit or Amit’s generation?
And when do you actually go from transition mode to actually executing the succession plan?
Chandra: The day I decide to retire.
Which is when? Do you have a timeline now in mind? When do you expect to actually hang up your boots?
Chandra: I think I will surprise a lot of people.
You are going to surprise a lot of people by staying on longer or by exiting sooner?
Chandra: By exiting sooner.
By existing sooner, really? You are almost, what?
Chandra: 58 headed to 59.
58, 59 so heading into your 60th. Is that going to be it for Subhash Chandra?
Chandra: I don’t know yet. You don’t want me to declare now but one day you will have it.
OK, give me your three-year horizon. Where do you want to take Zee (Zee Entertainment Enterprises Ltd) in the next three years?
Punit Goenka: See, we have the largest network already in this country. And slowly and steadily, we have to expand our businesses outside of this country as well. Rather than focusing just on South Asians, why can’t we go out and start focusing on the local market there? So that’s what we think we will be working on.
So the international opportunity is going to be a big area of focus for you?
Punit Goenka: It will be because where do the new, the growth drivers come from?
Entertainment and news?
Punit Goenka: Well, entertainment to start with, news is a far more complex business. We have not even completed our news offering for India yet. We are only present in Hindi language.
In fact, that’s the big speculation and buzz, when we are actually going to see you enter the English news space. This has been going back and forth. Have you finally made up your mind as far as this is concerned?
Punit Goenka: Well, we are definitely going to get into the English news space.
It is just a question of timing?
Punit Goenka: It is just a question of time.
And do you have a timeline now in mind?
Punit Goenka: I think we will definitely start working on it (in the) next fiscal.
Next fiscal? You think that there is enough room in the market for another English player, and which side would it be—in the general news space or the business news space?
Punit Goenka: Well, the first stage would be definitely general news space. And then we will take a call whether business news space also has to be entered or not.
Now the point is that for us it is not only about whether there is enough space in this market, but we have to complete our bouquet. So from that perspective we have to be present in all. Apart from news, even kids genre is something that we haven’t even started to work upon.
But once again, since you are talking about expanding, and especially expanding in international markets, what about funding requirement at this point in time?
Punit Goenka: Well, Zee doesn’t have any funding requirement. We are already generating in excess of close to Rs400 crore of cash every year and plus we are sitting on reserves of over close to about Rs2,000 crore. So I think we should be able to fund our expansion from internal accruals.
Internal accruals, so no fund-raising plans at least at this point in time. What are the gaps in your product portfolio that you would actually like to plug at this point in time?
Punit Goenka: As I said, you know, on the Zee Entertainment side, I have the kids genre, which is missed completely for us, so that’s one hole that we have to plug. We are working on lots of niche content. We have already applied for approvals to get uplinking licence for a golf channel. It’s going to be a joint venture company with a US major 24-hour golf channel. We are exploring other niches like the food businesses, we are exploring home shopping.
Do you you think these niche channels in that sense really make money? We already have a few players in the 24-hour home shopping market already.
Punit Goenka: Well, I currently have definite plans of getting into the golf business, and we are going to be launching two high-definition channels by the end of this year.
Two golf channels?
Punit Goenka: One golf channel and two high-definition movie channels. One will be a Hindi high-definition movie channel and other will be an English high-definition movie channel. So three channels already on the anvil.
We have already invested this year into creating a local Russia for ourselves, with basically all our content dubbed into or subtitled into Russian language. So that should start seeing some traction... Our experiment in Bahasa language has worked wonderfully well, it’s a profit-making business for us. We have started dubbing into Arabic.