In life, when you are looking for something ‒ be it a life partner, or a mentor, or an investor ‒ you meet a lot of wrong people before you meet the right one… Dr Annurag Batra shares his experience of meeting one such ‘conman non-funder’
By Dr Annurag Batra, Chairman and Editor in Chief, BW Businessworld, Exchange4Media
Through their journeys, entrepreneurs are known to take leaps of faith multiple times in their dealings across the spectrum of stakeholders? Investors, bankers, investment bankers, media, regulators, policymakers, and even senior management within their own companies.
This ability to deal with the unknown, to trust others as well as collaborate internally and externally, makes them leaders in the world of business. Entrepreneurs take bets – some work out and some don’t. But as long as the ones that work out are strategic and at scale, they help build a business and create wealth. I have been a first-generation entrepreneur for 21 years now. Neither my parents nor my elder sister ever ventured into business. All three have been academics and that has given them happiness and a livelihood. I grew up in a family where you kept a commitment once you made it. It was always considered the most normal thing to do. I saw the honesty, sincerity, and simplicity of my parents? they say what they mean and mean what they say. So, I learned to take people at face value. That attitude has extended to business and it has made me believe in what people say – even though it has at times, resulted in taking some knocks in business.
Despite that, I continue to take people at face value till proven wrong. For me, a person’s word matters. In fact, it is the only thing that matters. If there is something one couldn’t do, then the “no” comes faster than the “yes”. That’s how I have been these last 21 years. I founded the exchange4media group and by God’s grace, we did quite well, barring minor hiccups here or there that any business may go through. I acquired BW Businessworld eight years ago and did raise some growth capital at the time of acquisition. However, as the capital requirements scaled, I struggled to raise it for various reasons that I shall certainly write about someday. As I went about raising capital, my friends introduced me to a financial service professional, investment banker Sanjeev Sinha. Sanjeev has an impeccable track record, having worked with venerable financial services giants across the globe. Sanjeev in turn introduced me to a would-be investor by the name of Laxmi Prasad, or to be precise, Palyapu Laxmi Prasad, Chairman of the US-based, Interps.
Sanjeev also advised me that we should do the transaction on merit and provided everything is in black and white. While the transaction did not happen, Sanjeev and I became very close friends. I found Sanjeev to be a true professional and a great human being.
Sanjeev mentioned before the first meeting that the man did have a chequered past, which he would himself explain. It was at an exchange4media event at ITC Parel in Mumbai and we met at the top floor board room of the hotel. Laxmi Prasad showed up with a lady associate and began explaining away his accounting misdemeanours.
Prasad claims to have $10 billion worth of retirals under management in his US firm, Interups, mostly of Indian expats. Indian records show a history of allegations and litigations against him for fraud in general, although each different issue has its own specifics. For the past few years, Prasad has been popping up at boardrooms and media features with pervasive regularity. His raison d’etre is his supposed penchant for buying stakes? ranging from a significant minority to complete majority? in a slew of companies across the spectrum. In retrospect, we are all experts.
But let me tell you, when in life you are looking for something? be it a life partner, or a mentor, or an investor? you meet a lot of wrong people before you meet the right one. Being a first-generation entrepreneur, I have always trusted people and learned from my own first-hand experiences. I believe that even as we go through a few disappointments, the right person will emerge. So I take chances? half-chances? even quarter chances.
There were two red flags with Laxmi Prasad:
First, he shared his past from the USA, which should have been enough for me to get alarmed and abort our discussions.
Second, he was from Hyderabad. Let me be very clear – I have no prejudice against Hyderabadis; some of my very close friends are from there and they are good, honest human beings who always keep their word. But without prejudice, I must mention something a now 65-year-old billionaire who starting from the age of 20 has gone on to build a multibillion-dollar conglomerate told me. He warned me against working with operators from Hyderabad as it was very common for frauds to emanate from such sources. He even wrote me an email asking me to be cautious.
But I took a chance with Laxmi Prasad. We must have had, maybe, 10 or 12 meetings, to be able to finally arrive at a term sheet. The last few meetings that we had were at The Leela in Mumbai, with the venerable Mr. Vivek Nair as the host. Prasad told me he was investing over Rs 3,000 crore in Mr. Nair, and so Leela was rolling out the red carpet for the man, for the group needed the funds to tide over rough weather. Mr. Nair was known to me through a common friend, Mr. Moses Manoharan, a media man across three decades. Mr. Nair and the Leela Group were kind enough to provide us the Leela Palace complimentary for the launch of BW Hotelier – a magazine that has gone on to become the undisputed leader in the hospitality media domain. In retrospect, I realize that I should have checked with Mr. Nair, and possibly, he should have done the same with me. But neither of us did. So here was Laxmi Prasad enjoying the unparalleled Leela hospitality, extra red carpet thrown in. And we all now know that Mr. Nair could not raise monies and the Leela group was ultimately acquired by Brookfield.
Mr Nair possibly depended completely on Laxmi Prasad. A man who was of course, fake.
Why do I say, of course, a fake?
It was sometime in early 2018 that we signed the deal one early morning at Leela Mumbai over breakfast. And Laxmi Prasad was for a change, offering breakfast to my colleagues and me. Laxmi Prasad had agreed to be an investor in BW Businessworld and its associate media entities. It was a big term sheet – a multimillion-dollar deal. And then he pretty much disappeared after signing the deal. I kept following up for a couple of months and when he did care to respond, he kept assuring me it would happen.
Even when I was signing the deal, I knew the chances were 50:50. But as an entrepreneur you need monies; you stay hopeful and believe in miracles. This had happened once before to me and I thought to myself that God is kind to me, so maybe this time God has sent me a genuine person. I truly believe in God and place my faith in the hands of my Lord Rama.
However, as this deal fell through, it ended up with me struggling without growth capital for three years. And my existing investors kept wondering and enquiring about when the money would come in. After a while, I had to tell them the story with absolute transparency. I even ended up borrowing money in the hope that the investment would come in. But the deal never did happen, and I tried to forget Laxmi Prasad. Albeit, he is really unforgettable (and not in the Nat King Cole way).
And yet, I had pretty much forgotten about him till Air India was put on the block? and lo and behold ? in a leading Indian print daily I see Laxmi Prasad on the front page. I shook my head in disbelief that he could be a bidder for the national airline. I called my friend and colleague, Prasar Sharma, who had worked on the deal with me. We had a good laugh, seeing him back at his game! I remember joking that Laxmi Prasad couldn’t possibly buy an Air India economy plane ticket on his own, let alone the airline itself. I wanted to tell my friends who matter, but then I said that I should let Laxmi Prasad’s karma be his own. I did not want to play God, and talk about or write about this. And in the end, Air India did return home safe to the Tatas.
And once more I forgot about Laxmi Prasad till this last Saturday, the 30th of October. Per chance, I bumped into Mr Pavan Ruia of Dunlop, a businessman and entrepreneur from Kolkata, while at lunch with friends and colleagues. Mr Akhil Reddy of MEIL was with us and as we got talking, they both realised that they have been run down the alley by the same man ? Laxmi Prasad. As soon as they mentioned his name in their casual conversation, I jumped right in.
And now I realised that I was not the only one Laxmi Prasad had promised money to and delivered nothing. Mr Vivek Nair was another who had suffered because he trusted that man. And then there was Mr Ruia and Mr Reddy. I was told he also misled the HCC founder and creator of Lavasa, Mr Ajit Gulabchand. And just as with Air India, he was one of the suitors for the Shipping Corporation of India. I was told of multiple businessmen who have gone through the same experience or worse. I decided that I had to write this article ? and then to top it all ? today as I spoke to the MD of a large Mumbai-based NBFC about my upcoming article, he named the subject of my article, without even naming the man.
The great irony is that despite claims of multi-billion dollar AUMs and bids on everything, there seems to be not a single bid to this man’s name. And while one could possibly account for some of those under qualification criteria (read Air India) or tough competition (insolvency bids), there remain umpteen examples where he has been the only player in the game, seemingly always coming in last in a one-horse race. And in (many) more than one case, he has left a house on fire in a condition worse than when he came in.
I believe that Laxmi Prasad needs to be exposed so that no one trusts him the way I and so many others did. I want to make sure he does not play with the lives of people. I need to warn entrepreneurs so that they don’t fall into Laxmi Prasad’s trap. There are many Laxmi Prasads out there and entrepreneurs need to be careful.
So this does beg the question as to why I am writing this column with real names and baring it all?
1. I hope Laxmi Prasad is checked and he redeems himself. It’s never too late to do the right thing for the right reason in the right manner.
2. I hope entrepreneurs like me seeking funding, are more diligent and ask the right questions.
3. I know entrepreneurs live on hope and expect miracles and a lot of times entrepreneurs are a product of miracles. However, hope is not a plan.
4. I also want to say that entrepreneurs should check with one another.
When Laxmi Prasad duped me of time, energy hope and the money I spent on him, I castigated myself for it. My family and my friends told me I am not wise. But Laxmi Prasad also cheated many other seasoned entrepreneurs who were not first-generation enterprisers like me. In a way, I felt a sense of relief that even seasoned entrepreneurs are human and live on hope and trust just as much as the new ones. The silver lining though is that as my search continued, I met more than a few amazing individuals who have more than made up for the likes of Laxmi Prasad.
Eventually, it all did work out for me but I still wanted to pen this so that other young entrepreneurs or those inspiring to take this route would not be misled and can learn from my experience.
I hope Laxmi Prasad is brought to book. And I do hope my next column about a conman from Hyderabad next week, doesn’t stereotype my friends from Hyderabad. And to make sure that no prejudices or stereotypes can come out of these, I will also soon write about the committed and honest entrepreneurs I have met from that great city.
In conclusion, I would like to say that we land up with a man who seems to be trumpeting himself with aplomb in media, while many genuine entrepreneurs regularly end up at the receiving end of hit jobs on the pretext of some routine business issues being twisted out of proportion and context. We have a man who seems to have access to almost a bottomless pit of cash, but keeps losing every bid, including as mentioned above, myriad examples where he has been the only bidder! We have a man who claims to have the capability and thirst to acquire everything, but when the dust settles after each deal, what we ultimately have is THE MAN WHO ACQUIRED NOTHING!