sign in sign up
<<
Home , Bank of Hindostan, Charles Eyre, Dare House, Direct Action Day, Martin Burn, Satyagraha House

The Legacy Continues...

Rathin Datta

A history of Price Waterhouse, Lovelock & Lewes and PricewaterhouseCoopers Pvt. Ltd. in

Rathin Datta This is an internal document of Price Waterhouse, Lovelock & Lewes and PricewaterhouseCoopers Pvt. Ltd. meant only for the private reading of the Partners and Executive Directors of these entities and intended to be archived by these entities as an internal record.

Published by Nandini Chatterjee of PricewaterhouseCoopers Pvt. Ltd., Y14, Block EP, Sector V, Salt Lake, 700 091, as an internal document of Price Waterhouse, Lovelock & Lewes and PricewaterhouseCoopers Pvt. Ltd.

Design: [email protected] Printed by: Paramount Printographics Contents

Introduction 5

Chapter I –The Early Days

Calcutta in 1880 7 The founding of PW 9 The founding of L&L 15 The shifting of the Capital 22 International linkage of PW 23 The Managing Agency Houses 31 The Indian Industrialists 33 Post World War I 34 Early years of the profession 37 Offices in those days 39 Run up to World War II 43 Birth of a Nation 46

Chapter II – Post Independence Era

The dawn 49 Cawnpore & Madras 50 East 50 Socialistic Pattern of Society 52 Leadership changes 53 Eclipse of the Agency Houses 55 Other Offices 57 Nationalisation 59 1970s-1980s 61 Regulations 69

Chapter III –The Era of Reforms

1990s 71 Reforms 74 Merger 75 The rise of MCS 78 Not IT alone 85

Epilogue 90

Appendix 91 Madras () Office 92 Bombay () Office 94 New Office 96 Bangalore Office 98 Pune Office 100 Hyderabad Office 102 Bhubaneswar Office 104

The Legacy Continues... 5

Introduction

In the last quarter of the nineteenth reforms of 1991 which has sent this century, in the city of Calcutta on nation of more than a billion people the of the river Hooghly, two hurtling in the accelerated trajectory of enterprising accountants Marc growth and prosperity. Meugens and W A Browne had started their individual professions as Out of PW had emerged a consulting accountants, auditors and liquidators. company, Price Waterhouse Associates From these two practices evolved the Pvt. Ltd. (PWAPL). PW and PWAPL two large Indian professional firms of were member firms of the Price Price Waterhouse (PW) and Lovelock & Waterhouse network. L&L was a Lewes (L&L). Almost from the inception, member of the network of Coopers they were the two bigger firms among & Lybrand. And when these two their peers – a position they retained networks merged, PW, PWAPL and

all along as they grew and prospered L&L came together and became Rathin Datta, Chairman and CEO together, side by side, over more than members of the merged worldwide PricewaterhouseCoopers Pvt. Ltd. a century – living through a history network of PricewaterhouseCoopers. which saw a country under the yoke PWAPL then changed its name to of a foreign rule, the two world wars PricewaterhouseCoopers Pvt. Ltd. of 1914 and 1939, the devastating (PwCPL). famine of 1943, a unique struggle for independence the like of which Browne had set up his practice in 1872. the world had never seen, the birth Meugens had followed suit 8 years of an independent nation, followed later in 1880. Taking the later of the two immediately by the colossal bloodshed dates, the year 2005 marks the 125th of a fratricidal communal riot from year of their combined presence in this which India emerged to establish the country. largest democracy in the world, the struggle for growth in the restrictive post independence economic era dominated by socialist policies and finally the economic emancipation ushered in by the liberalization and 8 The Legacy Continues... The Early Days Calcutta in 1880

Hark back to 1880. The city which Job rule was politically a relatively quieter Charnock, then agent of the period. It witnessed a spurt in machine Company, founded on that monsoon based factories and afternoon of 24th August 1690 and mining. Calcutta which grew on the site of the three had become fishing villages of Gobindapur, the hub mainly and Dihi Kolikata (which his successor for jute, tea and and son in law Charles Eyre purchased coal (and also for the Company, for a sum of Rupees of other sundry 1,300 from the Sabarno Roy Chaudhuri manufacturing family on 10th November 1698) had, business), by 1880, become the most important mostly promoted centre of economic and administrative by Scottish activity east of the Suez. Lord Ripon and English was the ruling India from the entrepreneurs who imposing Government House built formed Managing in 1802 by Lord Wellesly at the site Agencies in of the old Buckingham House west partnerships of . Queen Victoria had to manage not already proclaimed herself the Empress only the rupee of India on 1st January 1877. Calcutta companies set was the capital of British India – the up by themselves “city of palaces” – in the words of Lord but also the Curzon “the second city to London in Indian businesses of the sterling the entire .” companies promoted in London by their countrymen. Their interests were Following the Sepoy Mutiny in 1857, represented by the powerful the had yielded Chamber of Commerce which had its administrative authority over India to been in existence since 1853. The the British Crown in 1858. The second Marwari traders, some of whom had half of the nineteenth century which made their fortunes in the earlier saw the consolidation of the British decades exporting opium to China

The Legacy Continues... 9 Royal Exchange Building in 1880 and cotton to Lancashire during the Marylebone Cricket Club, which was American civil war, were emerging established in London in 1787. Racing as a significant group in the Calcutta took place in the early mornings money market working as banyans for between 7 o’clock till 9 and Polo was the managing agency houses. There played in the afternoon at the were also the Armenians, the Jews, the by those who could afford it. There Parsees and the Chinese. The French was the Bengal Club established in and the Portuguese who had preceded 1827 next to the Maidan (at the site the British had their colonies a few which used to be the residence of Lord miles up the river in Chandannagore Macaulay) exclusively for high placed and Chinsurah. They all lived side expatriates “into which it was difficult by side with the original Bengali to obtain an entrance unless you had inhabitants. It was a cosmopolitan city been a long time in the city and had a bustling with trade and activity. certain standing”. The Saturday Club was established in 1880 for sports Prior to 1880, the only means of and leisure. (The Calcutta Club started transport were the palanquins and much later, in 1907.) hackney carriages. 1880 witnessed the introduction of the first public transport Nationalism was simmering on the by the Calcutta Tramways Company surface. The whose horse drawn trams started plying was yet to take birth. (It was founded the course from the Sealdah railway in 1885 by seventy-two political station to Chandpal Ghat via Dalhousie workers with W. C. Bonnerjee as the Square. Bicycles arrived in 1889 and first President, under the initiative of a the first motor car in 1896. Telephones retired English IAS officer A. O. Hume.) arrived in 1882 and the first movie was Meanwhile, the great novelist Bankim shown in the Star Theatre in 1898. Chandra Chattopadhyay had already composed, in 1875, the famous song The English had brought cricket to starting with the two famous words Calcutta which was played under the Bande Mataram (which he inserted in auspices of the Calcutta Cricket Club his novel Ananda Math in 1882) – which (CCC). The discovery of a reference was to become the clarion call of to this club in Hicky’s Bengal Gazette India’s independence movement. of 1780, predates this club to the Author of ‘Bande Mataram’

10 The Legacy Continues... The Early Days The founding of PW

It was in the above ambience, on 24th earthquake and plague in Calcutta. September 1880 that Marc Meugens, On his father’s retirement he became an Englishman of Belgian descent the senior partner of the firm. Under started his practice as accountants, his stewardship the firm grew rapidly. auditors and liquidators at 6 Old (There is an unconfirmed heresay that Post Office Street. It appears that the at some stage during this period the practice grew rapidly, for within four firm moved to 138 Canning Street.) years, by 1884 he had inducted a partner, I M King converting the sole E E Meugens soon became a proprietorship into a partnership under prominent member in the society. For the name and style Meugens & King. some years he sat on the Viceroy’s In 1892 he inducted a third partner, Legislative Council. During the war he Simpson, into the firm and the name was the Comptroller of Hostile Firms was changed to Meugens, King & in India. His roots were Simpson. After Simpson’s retirement in from Belgium and for his 1910 the name changed to Meugens, distinguished services, King & Co. his grandfather’s native country awarded him the In those early days, like in the early Order of the Crown of years of the profession in the UK Belgium. It still lies in the and USA, the individuals were more safe in Calcutta. prominent than the organization and hence the firm names changed with the He was an avid sportsman entry and exit of partners. At the same and played football for time there was the recognition that the Calcutta. Football had goodwill remained attached to the firm become a craze. The which the individual helped to build Calcutta Football Club during his tenure as partner, for there had been founded by the were adjustments for goodwill when a expatriates in 1872. The partner joined or left. local Indians had founded the Mohun Bagan Athletic Little is known about Marc Meugens, Club in 1889. In the famous King or Simpson except that they had match in 1911, Mohun built a thriving practice as auditors Bagan wrested the Indian which had become well known. In 1897, Football Association (IFA) Marc Meugens’ son Edward Earle Shield by defeating a British Meugens came to India and joined his team. Whether Meugens father’s firm. actually took the field or watched from the galleries Born in 1875 and educated at Malvern, is not known. Meugens was E E Meugens was an enterprising also an enthusiastic angler young accountant when he joined and a keen shot – a catch Meugens, King & Simpson in 1897 of his unspent bullets still – the year in which there was the lies in the safe in Calcutta. Order of the Crown of Belgium

The Early Days The Legacy Continues... 11 Found in PW’s iron safe - Meugens’ bullets and silver filigree lady’s purses

12 The Legacy Continues... The Early Days The firm subsequently moved to Clive In 1916, E E Meugens gave up what Building (now known as Gillander had rapidly become a brilliant career House) which was built in 1912 at 8 in India and returned to England in Clive Street. Just one building away to order not to be separated from his son the south, at the corner of Clive Street who had gone back to England for and India Exchange Place, stands reasons of health and education. There the Royal Exchange Building – the he joined W B Peat & Co as a partner headquarters of the Bengal Chamber in their Birmingham office. However, of Commerce and Industry, a brass he retained his share in the Indian firm plaque at its entrance proclaiming that but left its operations in the hands of “The building which formerly stood on the two partners he had inducted in this site and was dismantled in the year Calcutta, Herbert Walford Hales and 1915 was the town house of Sir Philip Walter Percy Daniel. Francis, Member of Council, 1774 – 1780. Tradition says that the site was occupied by a house in which Lord Clive once lived and from which Clive Street derives its name.”

The Legacy Continues... 13 Brass Plaque at the entrance of the Royal Exchange Building. Sir Philip Francis mentioned herein was the person who fought the famous duel with in the 18th century at Belvedere (now the site of the National Library) Facing page: 4, Lyons Range

14 The Legacy Continues... The Early Days The Legacy Continues... 15 16 The Legacy Continues... The Early Days The founding of L&L

The history of Lovelock & Lewes devote his whole time to the London goes back to 1872 when a Scottish firm. Lovelock who had made India gentleman, William Adolphus his home decided to settle down in Browne set up his practice as public India and devote his full energies in the accountants, auditors and liquidators Indian firm. Thus Lovelock retired from in Calcutta. When the Institute of the London firm and Browne retired Chartered Accountants of England and from the Indian firm. From then on, Wales was formed in 1880, he was one the Indian firm came to be known as of the founding members. Lovelock and Lewes.

He practised as a sole proprietor for 9 Initially, L&L had its office at 25, years and in 1881 took as his partner Mangoe Lane, the same building in Arthur Samuel Lovelock who had which George Henderson & Co. and joined his practice in 1880 as a paid Lyall Marshall & Co. had their offices. assistant. The proprietorship was thus The house, one of the few that had converted into a partnership under a treasure vault, was owned by the the style Browne and Lovelock. The Barretto family of ancient Portuguese practice prospered and grew rapidly origin. A century ago, in the , and soon became a respected name one of the earliest agency houses in the business circle. In 1883, Browne of Calcutta, Alexander and Co. had and Lovelock became a member of the promoted the of Hindostan in Bengal Chamber of Commerce and which Joseph Barretto was a partner. Industry. Soon thereafter it became the That was the first commercial bank Chamber’s auditors. Within 5 years, in in India. The bank was located in 1886 they inducted a third partner John this building. In 1820s, Mackintosh Herbert Lewes and the name expanded & Co. and Palmer & Co. along with to Browne, Lovelock and Lewes. the support of several businessmen including Dwarkanath Tagore promoted In 1886, Browne and Lovelock entered , following which the into an agreement to set up a practice Bank of Hindostan went into liquidation. in London under the name Browne L&L was located in the upper floor of and Lovelock. This was not unusual in 25, Mangoe Lane where there was a those days since the Indian stint was curious door studded with flat knobs an adventure and most expatriates about which someone once remarked generally started thinking of retiring that it “leads to nothing in particular to their home in England once they but, when closed, hints at great crossed 50. The firm was established in possibilities”. Sometime, after the turn London. In 1889, Browne expressed a of the century, L&L moved to 4, Lyons desire to retire from Browne, Lovelock Range, behind the Writers’ Building. and Lewes, return to London and

The Early Days The Legacy Continues... 17 18 The Legacy Continues... Arthur Samuel Lovelock died in there, before going into India. She was Calcutta on 18th November 1903 at quite an accomplished amateur artist the age of 51. He was deeply mourned and died in Eastbourne, England in by the business community and in the c.1935. My grandfather was their only social circles where he had a standing child. He intended to join the firm but I of great respect. Lovelock lived in believe the intervention of World War I and the house in which he put an end to this ambition. lived still stands near the entrance of Lovelock Place, which was named after It’s interesting that Arthur Samuel him. Lovelock was held in high standing in the community. This confirms what my Lovelock’s great grandson, Ian father told me and also that apparently Lovelock gives the following information Arthur Samuel Lovelock was offered a from London regarding his great baronetcy for his work, which he turned grandfather – down for some reason, somewhat to the disappointment of my grandfather and “…..he married a certain Jeannette father!” Alexandrina Scott (related to the Scottish writer Sir Walter Scott) and certainly she Following Lovelock’s death, John – and perhaps Arthur Samuel Lovelock Herbert Lewes took over as the senior – spent quite some time in Sumatra partner. (though I’m not sure how this came about) and possibly met and married

Report of the Bengal Chamber of Commerce - 31st December 1883 - recording the admission of Browne and Lovelock as member.

Facing page: The first partnership deed - dated 12th May 1881 - through which William Adolphus Browne inducted Arthur Samuel Lovelock as his partner. Marc Meugens was still practising as a sole proprietor.

The Early Days The Legacy Continues... 19 Agreement dated 26th March 1886 by which William Adolphus Browne and Arthur Samuel Lovelock agreed to set up Browne & Lovelock in London

20 The Legacy Continues... The Early Days Browne confirms receipt of the full amount of goodwill payment in connection with retirement from Lovelock & Lewes.

The Early Days The Legacy Continues... 21 22 The Legacy Continues... The Early Days The Early Days The Legacy Continues... 23 The shifting of the Capital

In 1899, Lord Curzon became the independent India. The latter became Viceroy of India. In October 1905, at the national anthem of Curzon’s initiative a partition line was following its liberation in 1971. drawn down the middle of Bengal to create two provinces, for “administrative King George V who succeeded convenience”. The partition of Bengal Edward VII came to India and held ignited widespread protests. The the great Durbar in Delhi. He annulled started and the partition, announced clemency, spread throughout the country. Over awarded honours (including knighthood the next 6 years in Bengal it turned to to Mr. Justice Ashutosh Mukherji) - and revolutionary militancy. These led to announced the shifting of the Capital. the secret conception of shifting the Capital. The Capital was transferred from Calcutta to Delhi on the April fools Among the songs day in 1912. This was the first time composed by the had retreated before its subjects. during that period were Jana Gana Despite the transfer of the capital, Mana Adhinayaka Calcutta continued to remain the and Amar Sonar centre of manufacturing activity and Bangla. The former the headquarters of PW and L&L – and was sung in the it was not until 70 years later that the Calcutta session of branches in Mumbai and Delhi really the Indian National began to grow. Congress in 1911 and became the The agitation died down considerably national anthem of after the annulment of the partition

24 The Legacy Continues... The Early Days International linkage of PW

could be continued by them without day to day interference from England. Clause 17 of the partnership deed provided -

“Neither the said Edward Earle Meugens nor any partner in the business of W. B. Peat & Co. shall be required to reside in or to visit India or to do any work for the partnership or be required to interfere in the carrying on of After the First World War, the management or conduct of the established accounting firms in England partnership business and each started looking out for tie ups abroad, and all of them shall be at liberty not for imperialist reasons but as a to be engaged or concerned reactive response to serve clients who in any other business but the had spread overseas or to take up new said Edward Earle Meugens clients developing in new territories. and W.B. Peat & Co., shall One such was W.B. Peat & Co. which nevertheless influence any Indian had been founded by a Scottish business which may come to the accountant, Sir William Barclay Peat. In partnership firm within the scope 1916, following E. E. Meugens’ return of the partnership business.” to England, Peat purchased a portion of the former’s share in the Indian firm, From 1st January 1920 A E H Digby, Meugens, King & Co. and from 1917 was replaced by Thomas Law as the the name of the Indian firm changed to resident representative of W. B. Peat & Meugens, Peat & Co. Co. The constitution of the reconstituted firm was described as follows in the Legal opinion was obtained from a local directory; counsel in London, William Finlay, that as the Indian partnership carried on business in India only, no part of the profits could be taxed in England despite the fact that some partners resided in England. With the tax position cleared, W.B. Peat & Co. sent A E H Digby to Calcutta to represent their interest. The partners in India, however, ensured that the practice

The Early Days The Legacy Continues... 25 26 The Legacy Continues... The Early Days This & facing page: Legal Opinion dated 11th June 1917, obtained by W B Peat & Co. from the Hon. W. Finlay, K.C.of Munns & Longden of 4B, Fredricks Place, Old Jewry. E.C.2

The Early Days The Legacy Continues... 27 existing Price Waterhouse partnership in Argentina where the firm was renamed Price, Waterhouse & W. B. Peat. In 1919, a joint partnership was set up to start an office in Rotterdam. In 1920, they set up a joint firm in South Africa under the name Price, Waterhouse, Peat & Co. and finally established with fanfare the joint Continental Firm in Paris also called Price, Waterhouse, Peat & Co.

It was during the merger talks in July 1920 and in line with the discussions regarding collaborations overseas that Price, Waterhouse & Co had acquired from W. B. Peat & Co. fifty percent of the latter’s share in the Indian firm. The Indian firm thus came to be known as Price, Waterhouse, Peat & Co. from 1921.

The merger talks in London fell through in 1921 largely due to the objection of Sir Albert Wyon, then Senior Partner of Price, Waterhouse & Co. Following this, W. B. Peat & Co. revived their earlier relationship with the American practice of Marwick & Mitchell and finally merged with them in 1924. Thus was born Peat, Marwick, Mitchell & Co. Since Marwick & Mitchell already had an office in Paris, they pulled out of the joint venture in the Continental Firm. However, the two firms continued their joint interests in India, South America, Egypt and South Africa. William Barclay Peat informed Thomas Law that he represented Early in 1920, Sir William Peat had Peats, Price Waterhouse and E E been in negotiation in London with Sir Thomas Law remained the resident Meugens in India Gilbert Garnsey of Price, Waterhouse representative for W. B. Peat & Co., & Co with the object of merger of the Price Waterhouse and E E Meugens. two firms. The fact that Sir Harry Peat The international linkage resulted in was a personal friend of Sir Nicholas referrals to the Indian firm and the tie Waterhouse and the two families had up increased the work undertaken in become close helped. The merger India. In 1921, A.L. Dickinson along negotiations had been preceded with Cathles and W. Wright spent by discussions on possibilities of months investigating the accounting extending their collaboration in system of different Indian Railway territories outside the UK in line with Companies. Tradition has it that, the joint firm they already had in Egypt Peat had also visited India to render since 1911. In 1916, Peats joined the consultancy services in connection with

28 The Legacy Continues... The Early Days the accounting of the Government of India. In those days, the Comptroller & Auditor General’s (C&AG) office was located in Shillong (Meghalaya). In 1923, M C Spencer, a partner of Price, Waterhouse & Co., UK toured India to review the organisation and business of Price, Waterhouse, Peat & Co. This resulted in the induction of Wilfred John Younie into the partnership in 1924.

Herbert Walford Hales continued as the senior partner in India until 30th June 1929 (when he proceeded on leave prior to his retirement from June 1930) whereupon Thomas Law became the senior partner. E E Meugens died in England on 16th October 1929. One-third of his share was taken by the resident partners in India and the balance equally by Peats and Price Waterhouse.

The Early Days The Legacy Continues... 29 30 The Legacy Continues... The Early Days The Early Days The Legacy Continues... 31 Announcement of retirement of Sir William Barclay Peat

32 The Legacy Continues... The Early Days The Managing Agency Houses

Those were the hey-days of the used to bring natural ice in wooden managing agency houses in Calcutta. sailing ships to Calcutta dug out from Practically, the entire tea, jute and the Wenham Lake in USA before ice coal were under their control. The manufacturing was started in Calcutta wasteland order promulgated by the in 1878 by Bengal Ice Company Viceroy in 1861 permitting acquisition promoted by Geo Henderson & Co). of wasteland on liberal terms (intended Burrakar Coal was later acquired by to promote cotton cultivation in India Bird & Co. and became a client of L&L. in the wake of the American Civil War of 1861 which had disrupted American In those days, jute was a highly cotton exports to Lancashire) had profitable business. Jute was grown actually led to acquisition of large extensively in the Gangetic plains wastelands in north Bengal and of Bengal and was transported Assam by the British businessmen for down the river by barges to the cultivation of tea. The Assam Company jute mills which lined the banks of was the pioneer. This was followed Hooghly. Some of the big ones were, by the Jorehaut Tea Company and a Champdany Jute Mills (set up by a large number of other tea companies. Dundee businessman), Samnuggur Majority of the tea companies were Jute (floated by Thomas Duff) and under British managing agency houses Fort Gloster Jute Mill (promoted by like Andrew Yule & Co., Williamson Kettelwell Bullen & Co). All the three Magor & Co., Shaw Wallace & were clients of L&L. Jute used to be Co., Duncan Brothers, Gillanders exported from the Calcutta port to Arbouthnot & Co., Alex Lawrie & Co., Europe, Australia, and Devonport & Co., Jardine Skinner & Africa by Mackinon Mackenzie & Co. Co., Octavius Steel, Kilbrun & Co., and and Shoene Kilburn & Co. Practically all James Finlay & Co. Most of them were the jute mills were under the managing clients of either PW or L&L. agency houses and many of them were clients of either PW or L&L – with L&L The demand for coal to feed the Indian having the larger share. Railways led to the formation of a number of coal mining companies. On 7th January 1897, Kilburn & The founding of the Equitable Coal Co obtained the licence to provide Company broke the monopoly of electricity to the ‘town’ of Calcutta as the Bengal Coal Company originally managing agents of the Indian Electric founded by Dwarkanath Tagore. Co Ltd which was registered in London Equitable Coal was a client of PW. on 14th January 1897. The name was Burrakar Coal Co. was founded by an changed to the Calcutta Electric Supply American, Richard MacAllister who Corporation Ltd a month later. From had come to Calcutta as an employee 17th April 1899, it started generating of Tudor Company of Boston (which power from its first generating station at

The Early Days The Legacy Continues... 33 Emambagh Lane near Princep Street. 1864, they were labour contractors for (New York was electrified in 1882 and the railways until they acquired Burrakur London in 1888.) Calcutta Electric Coal and Oriental Jute (later Union Supply was and still is a client of L&L. Jute) from Richard MacAllister which set them on the path of becoming A unique distinction between the Indian the largest managing agency house and British managing houses was that in Calcutta. By 1890, Sam and Paul whereas the former remained within had retired leaving the leadership to the promoter families, the latter went Earnest Cable who grew the business on changing hands as the promoters and acquired F W Heilgers and Co retired and returned home. For (which brought in Titaghur Paper, a example, Andrew Yule which became client of PW) and they became known a PW client was founded by Andrew as Bird Heilgers. Earnest Cable was after he came to Calcutta in 1863 in succeeded by his son in law Edward partnership with his brother George Benthall in 1920s. who came in 1875. Andrew left India in 1888 and George in 1891. In 1892 their In South India, Arbouthnot & Co. nephew David Yule purchased their was one of the oldest and largest shares in the partnership and became managing agents. Its banking division the sole owner. After World War I David had attracted huge deposits mainly who had no son sold the business to due to the image of its senior partner a company Andrew Yule and Co Ltd Sir George Gough Arbouthnot, who in which his friend Thomas Catto was was also a member of the Madras the main shareholder and Vivian Hugh Legistlative Council. What the Smith (of Morgan Grenfell & Co) was depositors were not aware of was another shareholder. Thereafter, the that the company and its sole London company was run by professionals. agents P. Macfayden & Co. had Andrew Yule was a formidable recklessly invested in searching for managing agency with interests in tea, gold in the Nilgiri-Wynaad areas and coal, flour mills, jute, oil mills, inland in speculative ventures in the South navigation and the only one to have African gold fields and in coffee, sugar landed estate ( Zamindari and indigo ventures in West Indies as a Co). It also set up Dishergarh Power, result of which the deposits were wiped Indian Paper Pulp and took over the out. Macfayden committed suicide in management of Tide Water Oil and London on 20th October, 1906 and the Hooghly Printing, all of which were next day, Arbouthnot & Co. declared clients of PW. bankruptcy. Sir George was jailed for 6 months on grounds of cheating. L&L Another example was Bird & Co, a had been engaged to carry out the client of L&L. Founded by Sam Bird investigation into the company. in partnership with his brother Paul in

34 The Legacy Continues... The Early Days The Indian Industrialists

The scene in Calcutta dominated by the and Steel Company went into operation cement and tyre and became a flagship expatriates was different from that in in 1911 and Tata Hydro-electric Power of the Birla group) was and still is a western India where the Indian trading Supply Company commenced power client of PW. community had already embarked generation in 1915. into manufacturing activity from the The other was a Bengali engineer middle of the nineteenth century, The Swadeshi movement had inspired Rajendra Nath Mookerjee. In particularly in cotton textile - starting the setting up of some industries in association with an Englishman, Acquin with Cowasji Nanabhai Davar the first Calcutta – Bengal Chemicals (under Martin he set up the engineering firm Indian to float a cotton mill (the Bombay the initiative of Prafulla Chandra Roy), Martin & Co in 1892 and on Martin’s Spinning and Weaving Company) Banga Luxmi Cotton Mills (by the Nandi death became the virtual owner. The followed by Ranchhodlal Chhotalal (the family), Mohini Mills (by Mohini Mohon firm built most of the waterworks in Ahmedabad Spinning and Weaving Chakraborty), Calcutta Chemicals (by north India, light railway and tramway Company), Sir Dinshaw Petit (Maneckji the Mitras and Dasguptas), Calcutta projects in Bengal, several buildings Petit Mills), Morarjee Gokuldas, Pottery (by Manindra Chandra Nandy) including the Victoria Memorial in Damodar Thackersey Mulji, Khattau and Bengal Lamp (by Kiran Shankar Calcutta and by 1930 had become a Makanji - and the greatest of them all Roy). Apart from these companies large managing agency house. In early in that period, Jamshedji Nusserwanji which were born out of nationalist 1930s it acquired Burn & Co which had Tata who set up the Empress Mills sentiment, industry in Calcutta till 1920s under its umbrella, Indian Iron and Steel on 1st January 1877, the day Queen was largely owned by the expatriates. Co, Bengal Iron and Steel Co, Indian Victoria proclaimed herself Empress. However, there were two exceptions. Standard Wagon Co and the large His two dream projects for which he is Iron Works. They were together famous - setting up a steel plant and One of them was Ghanshyam Das known as . Martin Burn was generating power from the waterfalls of Birla. Belonging to the Maheshwari a client of PW. the Western Ghats - were realized by caste from Pilani in the Shekhawati his son Sir Dorabji Tata when Tata Iron region of Rajasthan, the Birlas emerged to vie with the Tatas for supremacy in the Indian business scene. With the profits the Birlas reaped from exports during the war time boom, G D Birla went on a spree of industrialisation - acquiring a sick cotton mill in Delhi, setting up the Birla Jute Mill near Calcutta in the teeth of hostilities from the Scottish businessmen who had monopoly over Jute in those days, floating Jiyajirao Cotton Mills in Gwalior and acquiring from Andrew Yule the old Kesoram Mills which was set up in 1877 - to name a few. Kesoram (which subsequently expanded into rayon,

The Early Days The Legacy Continues... 35 Post World War 1

During the First World War, business in Meanwhile, Gandhiji, back from Farmer, WIMCO, Guest Keen Williams, Calcutta was booming due to the large Champaran had called out for a J Stone, Metal Box, Indian Oxygen orders for war supplies. Both PW and nationwide in February and Shalimar Paints. In L&L’s client L&L saw changes in their leadership. 1919 to protest against the Rowlatt Bills list were added James & Nicholson, Herbert Walford Hales succeeded E. E. which aimed at curtailing civil liberties Marshall & Sons, ICI, GEC, Philips India Meugens as the senior partner of PW in the name of curbing terrorism. and Alkali & Chemical Corporation. following the latter’s return to England This had led to all over India (Imperial Tobacco which had launched in 1916. On the L&L side, Charles accompanied by violence and disorder its manufacturing operations in India Henry Coates (who had taken over as reaching a crescendo in . On before the First World War was a client the senior partner on the retirement of 13th April 1919 Brigadier General Dyer of L&L.) John Herbert Lewes in 1907) retired in marched an army column through the 1917 and was succeeded by Howard only opening in the enclosed courtyard It was during this time, in 1921 Victor Hart. Howard was a lieutenant in of Jallianwala Bagh and opened fire on that PW opened a second office in the 6th City of London Rifles and was a peaceful Baisakhi meeting killing 379 Cawnpore. The office was set up by killed in action in Russia on 23rd March people (official estimate) in 10 minutes. W.P. Daniel who was transferred from 1919. Howard was succeeded by India stood stunned. Rabindranath Calcutta. The main client there was Walter Reginald Tanner. Tagore renounced his knighthood. The the managing agency house, British Reform Act of 1919 giving effect to India Corporation which had under its the Montagu–Chelmsford Declaration control and management a number of 1917 proved unsatisfactory and of textile, woollen, leather and shoe Gandhiji launched the Non-Cooperation companies. Unfortunately, the climate Movement on 1st August 1920. (On in Cawnpore did not suit Daniel. He that day in the early hours Lokamanya suffered from ill health which was Tilak had passed away.) The movement further compounded, in his words, “by spread like wild fire throughout the a wrong injection given to me by Sir country. Leonard Rogers for blood poisoning” resulting in his retirement from the firm It was in this political atmosphere that in 1923. Thereafter, for a period of years ASSOCHAM was founded in 1921 at there was no partner in Cawnpore. The the initiative of the expatriate led Bengal office was for sometime at 123 Halsey Chamber of Commerce. Six years Road and was later shifted to Empire later the Indian business community Engineering Building. countered at the behest of G D Birla by setting up FICCI in 1927 with A major work undertaken by L&L during Purshotamdas Thakurdas as the first that period was in connection with President. the liquidation of the . The bank went into liquidation in Despite the political upheavals and April 1923 and the then senior partner uncertainties, business continued to of L&L, Dugald McKechnie along with prosper during the inter war period. It two other partners Walker and Ashworth was this period which saw the arrival were appointed liquidators. The work of the multinationals which started was carried out with the assistance of setting up subsidiaries in India. Many the bank officers who were retained by of them became clients of PW e.g. the liquidators. Alfred Herbert, Westinghouse Saxby & Mahatma

36 The Legacy Continues... The Early Days Cawnpore letterheads

The Early Days The Legacy Continues... 37 In the early days UK letterheads referred to offices in Calcutta and Cawnpore. Indian letterhead referred to offices worldwide

38 The Legacy Continues... The Early Days Early years of the profession

The first company legislation of 1850 During the deliberations leading to the was a laissez-faire document under enactment of the Companies Act, 1913 which even registration was not there was considerable debate whether compulsory. It was not until 1857 that qualifications should be prescribed for an amendment was made to limit auditors. The Commerce and Industry shareholders’ liabilities. The Companies Department strongly felt the need for Acts of 1866 and 1882 brought in licensing auditors. The Legislative provisions in their Schedule regarding Department held the contrary view keeping of accounts and their audit, but that licensing could only ensure there was no definition of the auditor. competence but not honesty and in any case the English Act as it then stood Thus when Browne and Meugens had did not contain any such provisions. started their journey, in the absence Ultimately the former view prevailed and of any prescribed qualification for section 144 of the Companies Act 1913 auditors, anybody who chose to provided that no person could act as describe himself as an ‘auditor’ could auditor unless he held a certificate from audit the accounts of any organisation the Local Government. However the which opted to get its accounts Governor in Council was empowered audited. Tradition has it that the balance to notify that members of specified sheet of one cooperative society had Institutions or Associations could also been signed by an engine driver with act as auditors. In terms of this, by a his fireman as his co-auditor. notification dated 14th March 1914, automatic recognition was granted to However, as always in history, business the Chartered Institutes of England was ahead of law and many organized and Wales, Scotland, Ireland and the companies had provisions in their Society of Incorporated Accountants Articles of Association for placing and Auditors. of audited accounts in their general meeting, particularly companies under Following the enactment of the the management of the managing Companies Act 1913, the Provincial agency houses. The emergence in Governments started issuing two types the scene of two organizations with of certificates to those they considered qualified auditors therefore fulfilled a fit to carry out audit – Unrestricted need. The fact that the auditors were Certificates entitling the holders to not only qualified but were themselves act as auditors anywhere in British expatriates like the expatriates who India and Restricted Certificates which owned and managed the companies entitled holders to audit only within the provided the level of cultural comfort. Province and in the language specified. This explains the rapid growth of the two firms from inception.

The Early Days The Legacy Continues... 39 In 1919 the Government of Bombay On 4th March 1931, Lord Irwin started awarding the Government approved the list of 16 non-official Diploma in Accountancy (G.D.A) for members selected to constitute the first which one had to pass the qualifying Advisory Indian Accountancy Board. examination of the Accountancy Thomas Law, the then senior partner of Diploma Board and complete PW (following Hales’ retirement in 1930) articleship for 3 years under an was one of the members. The other Approved Accountant in practice. The members included J.V. Pirrie (Fraser & Government of India issued directions Ross), Sir Hugh Cocke (A. F. Ferguson to the Provincial Governments to issue & Co, Bombay), Sir Shapurji Bomonji Unrestricted Certificates to G.D.As Billimoria (S. B. Billimoria & Co), Sorabji (and also to those who passed B.Com. Rustomji Batliboi (S. R. Batliboi & Co) with accounting and auditing from and L. Hudson (A. F. Ferguson & Co, Sydenham College, Bombay and Lahore). completed 3 years articleship with an Approved Accountant). Restricted The Auditors’ Certificate Rules Certificates were discontinued around 1932 was promulgated based on 1920. the advice of the first Accountancy Board. Thomas Law had a hand in the The Companies Act 1930 shifted the framing of the Rules. To enroll in the authority of issuing the Certificate from Register of Accountants (R.A.) one was the Provincial Governments required to pass the First and Final to the Central Government with a view Examinations to be held under the to maintaining a centralized Register Rules and complete articleship with an of Accountants and regulating the Approved Accountant for a prescribed certificate holders on an all India basis. period. Existing G.D.As and Chartered It was this Act which envisaged the and Incorporated accountants from setting up of the Accountancy Board the UK institutes were automatically which initially was to be advisory in recognized. The first First Exam was nature but in which lay the seeds of held in 1933 and the first Final Exam in what in due course would flower into 1935. G.D.A. exam was discontinued an autonomous body to regulate the from 1934. profession.

40 The Legacy Continues... The Early Days Offices in those days

In 1870s–1880s, when Browne and ruler typewriters for typing accounts Meugens had started their firms there and the main hall for the babus (i.e. was no electricity or telephone. One clerks). The lunch room became a could visualise the small offices behind fixture in Dalhousie Square in the early swing doors with the pankha-puller 20th century and had on its walls what sitting in the verandah pulling away at was called affectionately (or otherwise) the rope which via a pully used to swish the ‘rouges gallery’ i.e. the pictures a large length of cloth hanging from a of the retired partners. Cooked lunch contraption in the ceiling. One use of was provided only to the partners and the paper weight was that it got thrown the assistants. The partners would at the door when the punkha–puller have their certificates framed on the dosed of and the poor man had to wall (for authority or, according to the bring it back before commencing to critiques, for avoidance of doubts). pull again. regularly The cash department would be under carried advertisements of Stoney’s the personal control of the senior Patent Punkha Wheel which was partner as, in those days, it was the available for Rs 3 and the Rippingill’s symbol of power. There were three Patent Punkha Wheels available sets of toilets - one for the partners, for Rs 2–8 annas. There were also one for the assistants and one for the the aubdars, the khidmadgars, the babus. Tea would be served in trays to hookahbardars, the jamadars and the the partners, in cups with saucers to palanquin bearers. For visiting clients the assistants and the pantry-bearer outside the walking radius of the would bring the kettle and pour tea Dalhousie Square, one had to go on a into cups produced by the babus from palanquin or a hackney carriage. the drawers. One could make out a person’s position in the office by the By the time PW and L&L moved into toilet he used and the manner in which Clive Building (Gillander house) and he was served tea. 4, Lyons Range, things had changed rapidly with the advent of electricity, As business grew, a 5 step hierarchy telephone and cars. Broadly, the layout evolved – Partners, Senior European of the office was that there would be Assistants, Junior European Assistants, a wooden panelled office on one side Special Class Indian Assistants where the partners would sit, another and babus. The babus were initially room (not panelled) for the assistants, sub-divided into first class, second a fenced off cash department with the class and third class and later into cashier and several large and heavy senior Indian assistants and junior iron safes, a section for the daphtary Indian assistants. Senior European (who bound the audit reports and the Assistants were generally English or accounts), the typing section with large Scottish. Junior European Assistants

The Early Days The Legacy Continues... 41 Letter of H. W. Hales, Senior Partner Price Waterhouse, indicating that chargeout rates in 1925 were fixed in consultation between Price Waterhouse and Lovelock & Lewes

42 The Legacy Continues... The Early Days The Early Days The Legacy Continues... 43 were mainly graduate Anglo–Indians, Lewes.” Hales hastened to add “you will Meugens, King & Co and retired after Jews or Zoroastrians. Special Class understand that they are applied to new an incredible 57 years of service. In Indian Assistants were G.D.As and work only and we do not infrequently December 1958 a function was held in later R.As. Generally speaking Parsees find it politic to make considerable the Star Theatre to felicitate him on his and Christians, if available, were reduction therefrom.” completing 50 years with the firm. He preferred over the . Babus were was presented with a gold watch and matriculates. The burra babu or head clerk was the drama Mishar Kumari was staged an institution. He was the interface by the staff members (in which Dinen The scenario changed somewhat after between the sahibs (i.e. expatriates) Sen, Ram babu and Bishnu Chatterjee Indian students started going to the UK and the babus (i.e. clerks). He recruited acted commendably in leading roles). and returning as Chartered Accountants the babus, allotted their daily routine or Incorporated Accountants. (For including allocation to clients and had becoming a Chartered Accountant total disciplinary jurisdiction over them one had to do the articleship in the to keep them under control. The burra UK, but for becoming an Incorporated babu worked closely with the burra Accountant one could do the articleship sahib (i.e. senior partner), was his eyes under an Incorporated Accountant and ears, carried out his instructions, in India and go to the UK only to sit maintained discipline and decorum and for the examination of the Society of kept the office running. It was a position Incorporated Accountants and Auditors of power looked upto in fear and in – hence many students who could not some instances became synonymous afford to bear the cost of a 3-5 years with tyranny. Kripa Sindhu Chakraborty stay in the UK preferred to become was the last burra babu in PW. The last Incorporated Accountants.) in the line of burra babus in L&L was Nalinaksha Das. The institution of the In 1925 new charge out rates were burra babu came to an end in the post fixed at Rs. 10 per day for Junior Indian war period when identified audit groups Assistants rising to Rs. 200 per day for were formed with designated group-in- Partners. It appears that the rates were charges and the staff got permanently fixed in consultation. In a letter dated allocated to the groups. 23rd April, 1925 to Price, Waterhouse & Co, London, H. W. Hales, then senior Kripa Sindhu babu (or Krip as he was partner of PW, wrote that “these rates affectionately called by the sahibs), the were a matter of agreement between last burra babu in PW, had joined the ourselves and Messrs. Lovelock & firm in 1908 when it used to be called

44 The Legacy Continues... The Early Days Run up to World War II

The political ambience continued to were drawn and in the 1929 Lahore be volatile. On 5th February 1922 a Congress, declared Congress and Khilafat procession in that India’s goal was Purna Chauri Chaura (in UP), provoked by (total independence). On 26th January police firing, had attacked the police 1930 in public meetings across India, station where the police had taken the Independence Pledge was read refuge and set it on fire killing 22 out and collectively affirmed. Gandhiji policemen. Concerned that violence picked on the salt tax to register his would lead to countrywide repression, protest. He started his famous march Gandhiji had withdrawn the Non- to Dandi in the Gujarat sea coast. Cooperation Movement on 12th This galvanized the nation. On 6th February 1922. Gandhiji had been April 1930 he reached the coast and arrested in March 1922 and released picked up a handful of salt - and the only in February 1924. C.R. Das movement started and Motilal Nehru had broken away, throughout the country. formed the and having successfully fought the elections to Gandhiji was arrested along with other the legislative councils in November members of the Congress Working 1923, had sought to obstruct the work Committee, but was released in 1931 of the central legislature. Amidst all and the Gandhi-Irwin Pact of March this, on 3rd February 1928 the Simon 1931 provided for provisional truce. Commission headed by John Simon In August, Gandhiji sailed for London had landed in Bombay to investigate to attend the Second Round Table the workings of the 1919 reforms. Conference. Nothing came out of it. The Commission did not contain a Winston Churchill vented his anger by single Indian. This had provoked describing Gandhiji as “a seditious demonstrations across India in one of Middle Temple lawyer, now posing as which at Lahore on 30th October 1928, a fakir of a type well known in the East, a brutal lathi charge had taken the life of striding half naked up the steps of the . Viceregal palace…..to parlay on equal terms with the representative of the Meanwhile in May 1929 a Labour King Emperor.” The British Government Government under Ramsay MacDonald however knew that suppression came to power in Britain and on its could not be a long term solution and instructions Viceroy Lord Irwin declared this finally led to the Government of on 31st October 1929 that the implicit India Act of 1935 providing for the idea of the Montagu–Chelmsford establishment of a union of British Declaration of 1917 was the natural Indian provinces and Princely States progression of India to Dominion (nevertheless with ultimate powers Status. But when? On 23rd December resting with the Viceroy). In the ensuing Lord Irwin conceded to Gandhiji that general elections of 1937 the Congress he had no answer. The battle lines swept the polls.

The Early Days The Legacy Continues... 45 In 1935, Wilfred John Younie Within 3 months thereafter, on 1st succeeded Thomas Law as the senior September 1939, Britain went to war partner of PW. C. G. Ashworth was the with Nazi Germany and Fascist Italy. senior partner in L&L. The World War II had begun.

Clearly, the nationalist sentiment was Apparently for sometime during the at its highest. In the midst of all this it inter war period, L&L had some kind of was decided that the third Accountancy an association with Spicer & Pegler of Board would be constituted by election. London. The association terminated in By 1939, the number of Indian qualified 1943 during the Second World War. accountants i.e R.A.s far exceeded the British qualified accountants. In the During those days, as now, unrequited prevailing climate the senior partners ambition led to departures. George of two of the largest firms, B. J. Whitby Reed who did not make it to the of A. F. Ferguson & Co and W. J. partnership in L&L, left and started his Younie of PW failed to get elected - the own practice as George Reed & Co in former getting only 17 votes (out of Tower House. This was mirrored in the 386), the latter getting 55 votes (out of south by Ron Price who left Fraser & 384). Cyrill Gill of Fraser & Ross also Ross and set up his own practice under lost getting only 19 votes. However, the name R G N Price & Co. the Government took into account the fact that firms with foreign qualified accountants held more than 80% of the audit work. On that basis, in the notification dated 1st July 1939, the Government named B. J. Whitby and W. J. Younie as its nominated members on the third Indian Accountancy Board.

46 The Legacy Continues... The Early Days S.B. Billimoria & Co., S.R. Batliboi & A. F. Ferguson & Co. Co. Alexander Fletcher Ferguson, a chartered accountant from Scotland came to Sir Shapurji Bomonji Billimoria had set up Bombay in 1889 as the chief accountant of Ritchie Stewart & Co. (later to become S B Billimoria & Co. in Bombay in 1902. Forbes Forbes Campbell & Co.). In 1893 he started his practice and was the first 11 years later in 1913 Sorabji Rustomji British Chartered Accountant to do so in Bombay. In 1898 he took as his partner Batliboi had set up S R Batliboi & Co. P.G. Irvine, naming his firm Ferguson & Irvine. In 1902, Irvine retired owing to ill in Calcutta. (Incidentially, “Double Entry health and the firm became A. F. Ferguson & Co. with A. F. Ferguson and W. Turner Book Keeping” which everybody studied Green as partners. to learn accountancy in those days was written by his brother Jamshedji Rustomji Ferguson returned to England in 1912 and started a practice in London (the Batliboi who had separately established successors to which is the firm Ferguson Rowland & Davies). the firm Batliboi & Purohit in Bombay.) A. F. Ferguson & Co. grew rapidly and soon became the largest firm in western S B Billimoria & Co. used to represent India. It set up an office in in 1908 and established an office in Delhi in 1922. Ernst & Whinney (which was formed by In 1926, it purchased Niessen Dignasse & Co. in Lahore. Small offices were also the merger of Ernst & Ernst of USA with started in and Indore. For some years between 1910 and 1926 it had a the London firms of Whinney, Murray & branch in the Middle East. Co. and Turquand, Barton, Mayhew & Co.). S R Batliboi & Co. used to represent After independence, the Indian and Pakistan practices split on 1st November 1952. Arthur Young & Co. However, in both the countries, the independent firms carried on their practices under the name A.F. Ferguson & Co. At that stage they were representing both Price In 1989, Ernst & Whinney merged with Waterhouse and Peats. In 1977, A. F. Ferguson & Co. Bombay opted to represent Arthur Young to form Ernst & Young only Peats and A.F. Ferguson & Co. Pakistan opted to represent only PW. (E&Y). From 1989 to 1996 both S B Billimoria & Co. and S R Batliboi & Co, After the formation of KPMG in 1987 [as a result of the merger of Peat Marwick represented E&Y. S B Billimoria & Co. Mitchell (PMM) with Klynveld Main Goerdeler (KMG)], A.F. Ferguson & Co. Bombay ceased to represent E&Y in 1996 and in ceased to represent KPMG in 1994 and in August 2004 it joined the network of DTT. November 1999 joined the network of A. F. Ferguson & Co. Pakistan continues to represent PwC. DTT.

E&Y continues to be represented in India by S R Batliboi & Co. After the implosion Fraser & Ross of Andersen, their Indian practice merged with the E&Y practice in India in June Graham Ross had come to India in 1902 and joined as an assistant in Best & Co. 2002. He met Ian Fraser in the Madras Club when the latter was looking to set up an accounting firm. Thus was born Fraser & Ross on 24th May, 1907 with its first office at 17, Armenian Street, Madras. James Voce Pierrie became a partner in 1912 and was a member of the first Accountancy Board along with Thomas Law of PW. Bharat S Raut & Co. Pierrie retired in 1939. Cyrill Gill became a partner in 1923 and had unsuccessfully contested in the elections to the third Accountancy Board in 1939. Gill retired in Bharat Raut left the partnership in Sharp 1947. & Tannan and joined Price Waterhouse in 1983 in the tax department in Mumbai. One of the European assistants, Ron Price who did not make it to the partnership On 1st July 1986 he became a partner left the firm and set up his own practice under the name R G N Price & Co. in Price Waterhouse but left the firm in 1990 to set up his own practice as Bharat In 1983, Fraser & Ross started representing Touche Ross & Co. along with C C S Raut & Co. In 1993 Bharat S Raut & Chokshi & Co (Bombay). In those days Deloitte Haskins & Sells was represented in Co. became a member firm of KPMG India by P C Hansotia & Co (Bombay), Khanna & Annadhanam (Delhi) and Gupta following which the relationship which Chowdhury & Ghosh (Calcutta). KPMG had with A. F. Ferguson snapped in 1994. In 1990, Touche Ross merged with Deloitte Haskins & Sells and became Delloitte Touche & Tohmatsu (DTT). (The adoption of Tohmatsu in the name was in recognition of the Deloitte member firm in Japan, Tohmatsu Awoki Sanwa which had combined with the Touche related firm, Mita to form Tohmatsu & Co.) Khanna & Annadhanam left the network in November 1996 and Gupta Chowdhury & Ghosh was dissolved in 2000. The DTT network in India was augmented when S B Billimoria & Co (Mumbai) joined it in November 1999 and A. F. Ferguson & Co (Mumbai) joined it in August 2004. Thus DTT is now represented in India by Fraser & Ross, P C Hansotia & Co., C C Chokshi & Co., S B Billimoria & Co. and A. F. Ferguson & Co. They also practise in India under the name Deloitte Haskins & Sells.

The Early Days The Legacy Continues... 47 Birth of a Nation

Pacific fell to the Japanese. In 1942 Japanese forces overran Burma, crossed the borders into Assam and Japanese bombs fell on Calcutta. Meanwhile, Netaji had formed the (INA) in 1942 recruiting 50,000 Indian prisoners-of-war from Japanese prison camps and started marching towards India. His voice was heard over the radio exhorting Indians, “give me your blood and I will give you freedom”.

As the situation worsened, Churchill, under pressure from President Roosevelt of USA, President Chiang Kai-Shek of China and the Labour Party leaders to secure the active cooperation of India in the war, sent Sir to India. The draft declaration which Stafford Cripps brought promising Dominion status to India was rejected by the nationalists Viceroy Lord Linlithgow had abruptly who craved for full independence. announced British India’s entry into Congress passed the “Quit India” Second World War without consultation resolution in August 1942 and violent with the elected bodies in India. This protests followed. The authorities eventually led to the resignation of the arrested hundreds of Congress leaders. Congress ministries in the Provinces. In In the vacuum created, the Muslim June 1940, Winston Churchill became League, now led by Mohammad Ali Prime Minister in Britain and declared Jinnah, propagated that the British that “I have not become First Minister of Raj would turn into a Hindu Raj on the Crown in order to preside over the independence and demanded that liquidation of the British Empire”. Britain “Divide and Quit”.

The course of the war changed the On 6th August 1945, the first atom situation. In December 1941, Japan bomb dropped on Hiroshima and 3 attacked the American naval base at days later a B-29 bomber dropped Pearl Harbour bringing the war nearer another on Nagasaki. 70,000 people home to India. Soon the European were killed. The Second World War was empires in South East Asia and South over.

48 The Legacy Continues... The Early Days The war years of 1939 to 1945 were The war shortages, real and created, difficult times for both PW and L&L. had also disrupted living and working The conscription laws of the United conditions. Petrol was rationed, but Kingdom applied to the Europeans in side by side there was a flourishing India and many were called up to the black market. The partners came to army. Only the partners were exempt. In the office in buses specially run for top L&L for instance the European qualified expatriates. Younie, senior partner of staff was reduced to five partners PW, travelled in a car run on charcoal. and one assistant who had failed the medical test. The position was similar In the inter war period the Income-tax in PW. Yet the firms had to contend with Act of 1922 had been enacted. Auditors the increased volume of work resulting had to verify the tax provision in the from the new clients that had come accounts and this had led to some in during the inter war boom. Also the specialization in tax by the partners war itself generated additional work. signing the accounts. The need to raise For example, L&L had to carry out the resources for the Second World War led audits of the cost of construction of the to the enactment of the Excess Profits landing fields in Assam and the voyage Tax Act in 1940. This highly complicated accounts for the UK Ministry of War piece of legislation attracting tax in Transport. The partners of both PW and excess of a balance depending on L&L were all members of the auxiliary the movement of capital employed, forces and had to contend with doing called for real specialisation and soon the duties of those organisations. After a viable tax practice independent of the the fall of Rangoon to the Japanese audit started to evolve. When the audit these special duties included training was reorganized into groups and the in explosives and other preparations in clerical staff who hitherto were under the event of an invasion. Faced with the the jurisdiction of the burra babu, were situation, both firms started recruiting permanently allotted to the groups, larger numbers of Indians – both some identified staff were allocated for foreign qualifieds and Indian R.As. tax work. The separate tax departments Indians with UK qualifications were in PW and L&L evolved from this appointed at higher levels. nucleus. Eventually specialized In PW, for example, R. N. Sen who qualified assistants were recruited in joined in 1940 and Kailash Bhargava the tax departments. who had joined earlier were both taken in as Senior European Assistants. In Britain went to the polls in 1945 and the fact, it was the war years which saw the Labour Party won a landslide victory. beginning of the Indianisation of both became the Prime the firms. Minister. In the 1945–1946 elections in

The Early Days The Legacy Continues... 49 India, Congress formed ministries in “Long years ago we made a tryst 11 provinces and the Muslim League with destiny, and now the time in Bengal and Sind. A coalition was comes when we shall redeem formed in Punjab. The Cabinet Mission our pledge, not wholly or in full came to India and suggested the measure, but very substantially. formation of an interim Government At the stroke of the midnight hour, leading to independence. However, when the world sleeps, India Jawaharlal and Jinnah were clearly not will awake to life and freedom. A seeing eye to eye and Muslim League’s moment comes, which comes was called on 16th but rarely in history, when we step August, 1946. Communal riots broke out from the old to the new, when out in Calcutta, and spread elsewhere. an age ends, and when the soul On 20th February 1947 the Prime of a nation long suppressed finds Minister announced in the House of utterance.” Commons that Britain would withdraw from India no later than June 1948 and Both Bengal and Punjab stood Lord Mountbatten was sworn in as partitioned. Violent communal riots the last Viceroy on 24th March 1947. raged in both sides of the partition Soon it became clear that partition was resulting in mass migration. Over a inevitable. million people died. In the aftermath, on 30th January 1948, Gandhiji was At the stroke of midnight on 14th shot at point blank range by Nathuram August, 1947 the British Raj came to Godse and the Father of the Nation an end and two nations were born. passed away. Heralding the independence, Nehru made a moving speech –

50 The Legacy Continues... The Early Days Post Independence Era The dawn

Younie was a dynamic person with a then Minister of Commerce. The Bill accountants who were sought by PW vision and under his leadership PW went through the Select Committee and L&L. The matter was set at rest by had prospered significantly. Just before and was passed by the Constituent a Resolution passed by the Council in or around the time of independence, Assembly. The Chartered Accountants February 1958 recognising members Younie retired after serving as senior Act, 1949, received the assent of the of the Chartered Institutes of England partner of PW for 12 years. He was Governor General in Council on 1st and Wales, Scotland, Ireland and the succeeded by Walter Toft. About the May, 1949 and the Institute of Chartered Society of Incorporated Accountants same time the South African firm of Accountants of India was born. G P and Auditors, London provided the Price, Waterhouse, Peat & Co had Kapadia became the first President. G person resided in India and the split up into Price Waterhouse & Co Basu was the first Vice President. Board of Trade of UK continued to and Peat, Marwick, Mitchell & Co and accord reciprocal practising rights to Younie joined the latter firm as the 1952-1953 were milestone the members of the Indian Institute. senior partner which he served for years for both the firms. In 1952 The Council also recognised the about 3 years before finally retiring to Rabindra Nath Sen became the members of the Institute of Chartered his home in Moffat near in first Indian to become a partner Accountants of Pakistan, Australia, Scotland. of PW. In 1953 Priyamohan Ceylon and the approved accounting Chakrabarti and Premanjan bodies of Burma and South Africa. Within a year of independence, in Niyogi became the first Indian July 1948, the Government appointed partners of L&L. Three years later, (In 1989, the Department of Trade an Expert Committee under the in 1956, Susil Kumar Ganguly and Industry in UK stopped granting Chairmanship of C C Desai, Secretary was inducted as a partner in L&L. recognition to practise to members of Commerce, to examine the of the Indian Institute. Consequent question of setting up an autonomous With the passing of the Chartered upon this, from 8th December 1995, association of accountants. It was Accountants Act, the Auditors’ the Indian Institute ceased giving on the recommendations of this Certificates Rules, 1932, which new membership to those with UK Committee that the Bill to regulate the granted recognition to the Chartered qualifications and from 8th December, profession of accountants was moved and Incorporated Accountants of 1997 to those with qualifications from before the Constituent Assembly on the English Institutes, lapsed. This Ceylon, South Africa, Pakistan, Burma 4th September 1948 by K C Neogy, created an uncertainty for UK qualified and Australia.)

The Legacy Continues... 51 Cawnpore & Madras

Fuller had become a partner of PW R S Arthur was the senior partner of during Younie’s reign and was in charge L&L at the time of independence. A of PW’s Cawnpore branch. Fuller was significant development in L&L’s history a bachelor and a real burra sahib. He was the start of its Madras branch in lived lavishly in a sprawling bungalow 1947 at the initiative of Arthur. This in Cawnpore with a battery of servants fulfilled a long standing demand of and their dependents all well looked L&L’s large client base in the South to after. He loved driving long distances have permanent audit staff stationed and also owned an old aeroplane in in Madras. 16 years later, in 1963, PW which he would sometimes fly. He set up its branch in Madras – one of the retired in 1956, married an Austrian objects apart from client compulsions lady post retirement and settled down was to establish presence first, in view in Tyrol, Austria. The Cawnpore branch of the informal understanding PW then was slowly wound down after Fuller’s had with A.F. Ferguson & Co. that one retirement. By that time the spelling of would not open an office in a city if the the city’s name had changed to Kanpur. other was already present.

East Pakistan

Initially space was taken in the office After independence, a number of of Orr Dignam & Co. Later the office Calcutta based business houses shifted to the Chambers Building in the opened their East Pakistan corporate new business centre in Chittagong. The entities. Also the (now foreign) first clients apart from Orr Dignam & Co branches of clients needed to be included IGRSN, Lipton, James Warren, served. PW responded to the situation Esso and Duncans. initially by flying out people from Calcutta to audit the East Pakistan At that time the Price Waterhouse, Peat clients. In late 1949 Kenneth Hartley & Co, East Pakistan firm was formed a partner from Calcutta visited the with the expatriate partners of PW India port city of Chittagong on the banks and soon an office was opened in of the Karnaphuli to set up an office. Dhaka. Sifton who had joined Calcutta Nirmalendu Das, Satya Chakraborty relocated to East Pakistan as the and Debi babu were the first few people resident partner there. He was later who went to Chittagong from Calcutta. joined by D. J. Belton. The Calcutta

52 The Legacy Continues... Post Independence Era based partners visited Dhaka or office in East Pakistan anticipating Chittagong as and when necessary. R. that some of the clients would shift Rahman who had joined Dhaka visited to them. They offered R. Rahman Calcutta to gain experience as he was partnership initially for 3 years as their being groomed for partnership. After he partner in charge for East Pakistan. qualified as a member of the Institute of R. Rahman declined the offer and Chartered Accountants of England and with his two friends Saifur Rahman Wales, he was admitted as a partner in and Haq formed Rahman, Rahman Dhaka. & Haq. Some of the clients of Price Waterhouse, Peat & Co East Pakistan The political situation was volatile. went with them. Later R. Rahman left for -Muslim riots sparked Europe and Saifur became the senior intermittently and there were the great partner. A.F.Ferguson & Co formally Dhaka killings of 1952. Eventually, no commenced their practice in Spencers expatriate partner was willing to stay Building in Quaid-i-Azam Road in East Pakistan and it was decided Chittagong from 1st May 1962 and to close down the practices in Dhaka also set up an office in Dhaka from 1st and Chittagong from June 1962. Belton December in that year. The practices returned to Calcutta but then left India ceased with the fall of Dhaka in and after changing a few jobs worked December 1971 – when East Pakistan for some time in Price Waterhouse, became the independent country Paris. of Bangladesh. (Currently, Rahman, Rahman & Haq represents KPMG and At that stage A. F. Ferguson & Saifur Rahman is the Hon’ble Finance Co Pakistan decided to set up an Minister of Bangladesh.)

Post Independence Era The Legacy Continues... 53 Socialistic Pattern of Society

During the struggle for independence, industrialists in the pre independence concept of “disguised unemployment” the nationalists regarded the British rule atmosphere charged with nationalistic which could be absorbed with proper as an imperialist capitalist onslaught on and idealistic feelings. State investment. Everybody in those the poor country. They were enamoured During the 1950s, Prasanta Chandra days thought that with large State by the Russian Revolution and its policy Mahalanobis was the key intellectual investments in industry, India would, in of State planned development. It was figure in the Planning Commission and the words of Prof. Rostow, “take off”. not surprising that in the prevailing the main influence behind the Second That was the age of the radio and after atmosphere, in 1944, the leading Indian 5 Year Plan (1956 – 1961) which industrialists in Bombay – J R D Tata, declared as its object, the creation of G D Birla, Lala Shri Ram, Kasturbhai a “socialistic pattern of society”. The Lalbhai, Purshotamdas Thakurdas, A D Industrial Policy Resolution of 1956 Shroff and the well known economist, was announced and it effectively put John Mathai had produced the famous private industry in straight jacket. The “Bombay Plan” advocating the need concept was of a “mixed economy” for planned development and state which envisaged the setting up of ownership and control of key industries large public sector undertakings to following independence. dominate the commanding heights of the economy, with the private Jawaharlal Nehru who became the first sector under strict State control. The Prime Minister of independent India was policies were one of high tariffs (to a Fabian socialist. (Sardar Vallabhbhai ensure protection), import substitution Patel had a capitalist tilt and did not (considered to be the key to self favour control beyond a point.) Under sufficiency) and reservation of areas for Nehru’s guidance the first Industrial small scale industries (for protection of Policy Statement of 1948 provided that employment). It was during this period the State would have exclusive rights to that T T Krishnamachari as Commerce dinner, people would hear the English set up certain specified basic industries Minister nationalised life insurance and news read authoritatively by Melville De requiring large outlays and the private as Finance Minister accepted Prof. Mellow which covered Nehru’s famous sector could operate in the rest of the Kaldor’s concepts and introduced speech describing the public sector area but strictly under government wealth tax, expenditure tax, gift tax and projects as the “temples of modern control within the framework of 5 Year capital tax on top of 87.5% income tax India”. Plans developed by the Planning rate. Commission. To this end the Industries 1950s was a comparatively smoother (Development and Regulation) The economic theories then period for PW and L&L. G.R.Crooks Act, 1951, was passed requiring prevailing were those propagated by who had taken over as the senior businessmen to obtain licence to set Rosenstein–Roden which argued in partner of PW from Walter Toft in 1949, up units, to expand capacity or even favour of massive State investment, the also looked after the tax department to change the product mix. The First 5 Harrod–Domar model which stressed and had the halo of a tax partner. He Year Plan (1951 – 1956) was similar to on increasing the savings ratio as the retired after serving as senior partner for the “Bombay Plan” advocated by the path to growth and Ragner Nurkse’s 7 years and was followed for a brief

54 The Legacy Continues... Post Independence Era Leadership changes

period by Arnold Just and then by 1964 and 1966 were milestone years January 1966 in Tashkent (where he Kenneth Hartley. The otherwise for the country. Jawaharlal Nehru died had gone for a meeting with General smooth operations of the period were on 27th May, 1964 and with him ended Ayub Khan, ). In interrupted by a tragic plane crash on a chapter in Indian history. Lal Bahadur the same year, on 29th December 1966, 29th March 1959. The flight had taken Shastri was sworn in as Prime Minister the last expatriate senior partner of L&L, off from Calcutta for Silchar stopping en within a week of Nehru’s death. It was a Lt. Col. John Cuthbert Laing, OBE died route in Gauhati but encountered an air milestone year for PW also. Following a in Calcutta and S. K. Ganguly took over pocket and crashed in Hila Kandi. The visit to Calcutta by two London partners as the first Indian senior partner of L&L crash took the lives of two employees from Price Waterhouse & Co and Peat, (the two Indians who had preceded him of PW on their way to audit the tea Marwick, Mitchell & Co to look into in partnership having retired earlier – P. gardens (Pranab babu and Sunil Baran the affairs of the firm in India, Kenneth Chakrabarti sometime before 1962 and Chakraborty). During the 1950s, John Hartley retired and from 1st July, 1964 Premanjan Niyogi in April 1966). Steward Fyee Gibb was the senior R. N. Sen became the first Indian senior In the following year, i.e. 1967, under partner of L&L. He had succeeded R. partner of PW. the leadership of S. K. Ganguly, L&L S. Arthur in 1950. Gibb retired after became an associate member of serving as senior partner for 14 years in After serving as Prime Minister for barely the Coopers & Lybrand International 1964 and was followed by John nineteen months, Lal Bahadur Shastri network. Cuthbert Laing. died of a sudden heart attack on 10th

Post Independence Era The Legacy Continues... 55 The first Lovelock & Lewes deed without any expatriate partner - deed of 24th April, 1967

56 The Legacy Continues... Eclipse of the Agency Houses

Lal Bahadur Shastri had inherited a of their Raj. The Managing Agency the Benthall family finally withdrew country with a terrible food shortage houses had started disintegrating it sold the controlling shares to the - a “basket case” sustaining on soon after the independence as employees who acquired them through American PL-480 wheat. To his credit the expatriates started withdrawing their pension and savings funds. The goes his selection of C Subramaniam from India. The socialistic policies of Government eventually took over the as the Minister of Food & Agriculture. independent India added impetus company in 1976. It was the latter who took the initiative to this and what little remained was of importing 16,000 metric tones of swept away during the days of militant the miracle Mexican dwarf wheat trade union agitation. The Marwari seeds which ushered in the “Green traders and banyans, some of whom Revolution” in Punjab and Haryana and were money lenders to the managing made the country surplus in food. agency houses, now entered industry While agriculture prospered, industry acquiring the companies from the continued to be under severe retreating expatriates. Thus the Bangurs constraints. In particular, in Bengal, acquired Kettelwell Bullen, 1960s saw the leftists organising large Manufacturing (from MacNeill and mass movements and trade union Barry) and Bengal Paper (from Balmer struggles reaching its peak in 1967-69 Lawrie). Similarly the Goenkas acquired and continuing right through the next Duncan Brothers and Octavius Steel decade. Bengal became synonymous and the Khaitans who were suppliers with Bandhs (strikes bringing everything to the tea gardens acquired Williamson to a stand still) and Gheraos (forced Magor, took a stake in Macneill and confinement of management personnel Barry (which after merger with the by militant unionised staff). It was in that former became Macneill and Magor) atmosphere that the Lovelock & Lewes and McLeod Russell. The change of Employees’ National Union was formed hands did not, by and large, affect PW in 1965. 4 years later, the clerical staff of or L&L since they continued to remain PW formed the Price Waterhouse Staff the auditors of the entities. On the Union with Pranab Dutta of the L&L positive side it gave PW and L&L entry Union as its President. into the Indian houses.

It is an interesting fact of history that Whatever was left of Andrew Yule after whereas the invaders who came to the sale of their units to the Dalmias, India over the centuries, the Mongols, Bangurs and Goenkas faced major Huns, Persians, Pathans and Moghuls problems due to continung labour had all assimilated in the Indian melting troubles and the House was taken over pot (including the Parsees and the by the Government of India in 1967. Jews) – the Europeans i.e. the Dutch, Martin Burn met the same fate and its French, Portuguese and the British undertakings were taken over by the never really integrated en mass into Government in the same year. Bird India. They left on the conclusion & Co lasted a little longer and when

Post Independence Era The Legacy Continues... 57 The first Price Watehouse deed without any non resident partner - deed dated 15th December 1977

58 The Legacy Continues... Other Offices

In the 1960s, Bombay was rising not on 11th June, 1970). Apart from client only as the financial capital but also as compulsions and future prospects, the headquarters for a large number one of the reasons for the conception of companies in different sectors. Both of the office in Delhi was the agitating L&L and PW were eyeing Bombay. union. In May 1970, a Manager, Arun L&L set up their office first in 1961 – in Chatterjee was sent to Delhi to set Elphinstone Building, Veer Nariman up an establishment and operations Road. Samir Ghosh took charge were started from a small space within initially and was then replaced by D a client’s (Mr Vadera’s) office in New G Rajan. PW was constrained by the Delhi South Extension Part II. From informal arrangement it had with A. F. there the office shifted to Himalaya Ferguson & Co. Bombay under which House when I C Mittra arrived from they were to respect each other’s Calcutta to take charge. territory. Sometimes in mid 1960s, the arrangement broke down. In 1966-67, {In 1973, the PW partners felt that PW was carrying out a major consulting there should be a second vehicle assignment in Bombay Port Trust for for carrying on practice, if need be. which partner S B Ghosh had to be Accordingly, from 1st January, 1973 stationed in Bombay for about 2 years. they set up a separate firm called It was during that period that PW’s Choskey, Bhargava & Co. with head Bombay office took birth – initially office at Himalaya House in Delhi, operating from the auditors’ room in named after P K Choksey and Kamesh Burmah Shell and the residence of Bhargava the two senior most partners Ashutosh Sen (who was transferred to of PW at that time. (Permissions had Bombay) at Ishwar Bhavan, Malabar also been obtained in December, 1972 Hills until a small office was taken in from the UK to start up two subsidiary Bajaj Bhavan in 1974. firms, Price Waterhouse & Co. and Peat, Marwick Mitchell & Co. in New L&L set up a branch in Delhi in 1964 Delhi.) As events turned out later, PW at Gulab Bhawan, Bahadur Shah weathered the union agitations.} Zafar Marg. In late 1960s labour trouble was at its peak in Bengal. In PW was the first to go to Bangalore the situation, many of the clients of – in 1974 when it arranged to have an PW and L&L were considering shifting “address office” for receiving mails their headquarters out of Calcutta. The within client Monotype’s office in Price Waterhouse Staff Union had been Church Street, which was later shifted formed by the clerical staff in 1969 to Hotel Kamadhenu. After Maloy and started aggressively agitating for Sengupta’s transfer to Bangalore their rights (finally leading to a gherao (following closure of the Digboi office) of the partners by the union members his residence served as the office

Post Independence Era The Legacy Continues... 59 for a period until a proper office was taken at 4606 High Point, Palace Road. L&L’s Bangalore branch started when Ramesh Rajan was transferred there in 1988, his residence at 422, 4th Block, Koramangala serving also as the first office until an office was taken in New Delhi Copper Arch, Infantry Road.

In 1986, L&L transferred S Gopalakrishnan to Hyderabad who started operating, first from his Calcutta residence at Skylark Apartments, Basheerbagh and then took a proper Bhubaneshwar office in Lingapur House in Himayat Bombay Nagar. The first Pune office was opened Pune by PW in 1979 in Yerawada and Anita Hyderabad Utamsingh was the first manager. PW’s Bhubaneswar office was the project office for the large consulting Bangalore assignment of the Orissa State Madras Electricity Board, operating from 1994, first out of Oberoi Hotel and then from 1995 from Orissa Construction The names of Bombay and Madras Corporation Building. L&L also set up changed to Mumbai and Chennai in 1996 and Calcutta became Kolkata on their Bhubaneswar office at Forest Park 1st January 2000 in 1994. Map not to scale It has been a long journey since the days of the pioneers who sowed the seeds working out of their residences and from clients’ offices. The story thereafter has been one of taking larger and larger offices as clients and staff grew with the initiative and enthusiasm of the partners who subsequently came in (see Appendix).

An interesting coincidence in history was that both S B Ghosh and D G Rajan who pioneered the growth of the PW and L&L Bombay offices, returned to Calcutta to become the senior partners of the respective firms.

60 The Legacy Continues... Post Independence Era Nationalisation

In the ensuing election in March 1971, level. For example in PW, these were Indira Gandhi won a landslide victory handled by P. K. Choksey (who had on the plank of the slogan Garibi Hatao taken over as the senior partner when (remove poverty) and based on the R. N. Sen retired on 31st December, election promises adopted a radical 1971) and M.L. Daga. stand with the support of intellectuals with leftist leanings like P.N. Haskar, D.P. However, FERA also took its pound Dhar and Mohan Kumaramangalam. of flesh. The foreign oil companies Insurance was nationalised in 1972. operating in India, already facing stiff PW lost its insurance clients like competition from the large public sector Ruby General Insurance, Commercial giant Indian Oil Corporation set up in Insurance, Thread Needle Insurance 1964, lost their interest following the and Eagle Star. L&L lost Alliance FERA requirement to dilute foreign Insurance, Royal Insurance, Norwich ownership to 40% and accepted the Insurance and Queensland Insurance. government’s decision to nationalise In 1973, coal was nationalised. their Indian operations. PW lost three of This was a big blow with PW losing its largest clients, Burmah Shell, Assam Raneegunje Coal, Equitable Coal, Oil and Oil India between 1974 and Bengal Coal, Katras Jherriah Coal and 1976. New Beerbhoom Coal. L&L lost all its colliery audits including Kalapahari Coal (In 1969, PW had relocated Maloy Indira Gandhi succeeded Lal Bahadur and Barakar Coal. Sengupta from Calcutta to Digboi for Shastri as the Prime Minister of India. the audit of Assam Oil (Digboi), Assam Some of the policies adopted during In the same year, the Foreign Exchange Railways and Trading Co based in her reign directly affected PW and L&L. Regulation Act, 1973 (FERA) was Margharita (AR&T – which laid the first Faced with opposition from within her passed. Crippling controls were put rail track in North East Region), Oil party (which finally led to the split of the on foreign exchange transactions. India based in Duliajan and the tea Congress Party in 1969) she started Under FERA, foreign companies gardens of McLeod Russel group and taking a left of the centre stand. In July, (except foreign banks) could no longer James Warren. Bungalow No. 56B 1969, she nationalised the major private carry on business in India through which was provided by Assam Oil for commercial banks. PW lost the audits branches. They had to convert to Indian Maloy Sengupta’s residence became of and . In companies. The foreign equity holdings the official address of PW Digboi office the same year, the Monopolies and in Indian companies were required and it changed to Bungalow No.6 Restrictive Trade Practices (MRTP) Act, to be brought down, with certain when he shifted residence. The Digboi 1969, was passed severely restricting exceptions, to 40%. This called for office was closed down consequent the activities of large business houses. restructuring of companies, particularly upon the nationalisation of Assam Oil Substantial expansion by business the sterling tea companies and and the acquisition of Oil India by the groups with assets over Rs. 200 crore valuation of the undertakings and the Government.) was no longer possible without the shares. These generated substantial clearance of the MRTP Commission. work for PW and L&L at the partner

Post Independence Era The Legacy Continues... 61 The comptometer machines were the early L&L had its office. Training was also given by calculating machines patented by Dorr Eugene Central Commercial College in Beadon Street. Felt in 1887 who started the Felt & Tarrant Comptometers became obsolete in 1980s with Mfg. Co in partnership with Robert Tarrant. To the advent of calculators and computers and become a comptometer operator one had to now are collector’s items. Bishnu Charan De take training with Felt & Tarrant who had their and Mukul Banerjee were the last comptometer office in 4 Lyons Range, the same building where operators in L&L and PW.

62 The Legacy Continues... Post Independence Era 1970s - 1980s

I joined Price Waterhouse, Peat & Co and afternoon tea to the auditors) and as an articled clerk on 15th January then packed off to audit an orphanage 1968 - an inexperienced young man school called Dr Graham’s Home in the just graduated with commerce from scenic hills of . Those were the Calcutta University – on a princely the pre-computer days of hand written stipend of Rs 60 per month. R. N. ledgers and cash books. PW and L&L Sen was the senior partner and I owe had a fleet of comptometer operators my entry to the decision by the then who would carry their comptometer partners of PW to grant preference to machines to the client’s offices to check rank holders over candidates coming the arithmetic accuracy of the books. through references. (The legacy of this policy is reflected in the number of I qualified as a Chartered Accountant rank holders in the CA examinations in and joined PW on 15th January, 1971 subsequent years, some of whom have initially on a temporary basis for 15 remained back with the organization.) days at Rs. 200 and then from 1st By that time, the designations in the February, 1971 was absorbed as officers’ cadre in PW had changed an Assistant Manager at a salary of to Manager, Assistant Manager and Rs. 850 per month. In those days Junior Officer. In L&L, the designations PW had four departments - Audit, were Senior Qualified Assistants and Tax, Secretarial and Management Junior Qualified Assistants. In both Consultancy Services (MCS). The MCS PW and L&L all officers were allocated had been started formally some time to specific groups headed by group- back with Jagdish Agarwal and Gurdip in-charges. PW, in those days, was Singh Bindra and had a kind of a halo. an entirely male dominated world Bhaskar Banerjee who had appeared – the only lady in the office being in the CA examination along with me the motherly telephone operator Mrs and had come out first in the exam was Stephens. L&L was more progressive given the first choice and decided to and had a pool of lady secretaries join MCS. I decided to join Tax. (mysteriously called staff x). In those days the Tax department, I was articled to I. C. Mittra who was except for the clerical staff, was the staff partner at the time and was manned by ex Revenue Officers. I allotted to Amit Sen Roy’s Group and was the first home grown chartered on day one was sent to do casting accountant to join the Tax department (checking additions in the books and this set the precedence. Kamesh of account) in a bakery outfit called Bhargava, then the second partner Kalimpong Home Products (who in seniority after P K Choksey, had served pastries along with the morning oversight of the Tax department

Post Independence Era The Legacy Continues... 63 PW football team 1960

in addition to his audit and MCS was followed by a drama enacted responsibilities. by the employees. The female casts were played by external professional Life was more relaxed in those days. As actresses. (Barsha Sanyal who joined a normal routine, after showing the face PW as a Junior Officer after qualifying in the office, many of the officers would as a chartered accountant was the first go down to Café de Paris next door lady officer to take part in a female role for a cup of coffee before dispersing in 1991.) The L&L Recreation Club was to the client offices. Price Waterhouse equally active. It was affiliated to the Recreation Club was very active. The Cricket Association of Bengal and had PW team used to participate regularly in its proud moment in 1972 when it got competitive football organized by Office into First Division Cricket. A glimpse of Sports Federation. I had taken the field its 1968 tournament results is revealing for PW in the football match against – Sen Raleigh. The Recreation Club used to hold indoor games competitions Inter Office Football League 6th position which were keenly contested. Prizes Inter Office Cricket League 8th position were distributed in the Annual Social Inter Office Table tennis League 2nd position which was held in the winter every Lakshmibilas Shield Fixture 1st position year, where the prize distribution

64 The Legacy Continues... Post Independence Era I was under instruction from Kamesh knowledge, was Albert William Wyon Bhargava to go to the Income Tax who won the first prize in the 1890 final department every morning by 10.30 examination of the English Institute and a.m. and not to show my face before was the senior partner of PW, UK for noon irrespective of whether I had work 21 years.) I C Mittra was a gentleman there. That was how I came to know par excellence. It was he who wrote the all the Income-tax officers at the time Code of Conduct for the partners and and it was much later that I realised the how they should behave. S B Ghosh merits of the suggestion. (who articled under William Pickles in the UK and assisted him in revising When I had joined PW we looked up his famous book on “Accountancy” to the partners with awe. R N Sen, which Pickles acknowledged in the the senior partner was a towering Preface) was a dynamic person, with personality. P K Choksey, the next in tremendous decision making acumen. K. P. Bhargava command, was highly regarded for P K Mallik was larger than life. He his professional acumen. Kamesh radiated warmth and drew people like Bhargava was exceptionally brilliant. He a magnet. He became the President of held the record of coming out first in the the Institute of Chartered Accountants CA final examinations of the Institute of India, the Sheriff of Calcutta and of Chartered Accountants of England acted in “Seemabaddha” directed by and Wales. (The only other senior the famous film director . partner who had such a record, to my

Annual drama of Recreation Club

Post Independence Era The Legacy Continues... 65 A NOTE FOR NEW PARTNERS ON THE NORMS TO BE FOLLOWED

Certain qualifications and qualities, as laid down in MAN 3 in MAP issued by PWI, are required in a person who is being considered for Partnership in a PW firm. In addition to these qualifications and qualities, an incoming partner has to realise that certain responsibilities, other than those related to his professional abilities, also devolve on him. On becoming a partner he becomes a member of a team, the object of which is to maintain a high degree of professional excellence, to maintain the goodwill and I. C. Mittra reputation of the firm and the partners (both individually and collectively), to ensure the continuity of the firm and its steady progress. A strong team spirit, therefore, coupled with the feeling that partners in the firm are complementary to one another, is an absolutely essential factor in a partnership. Any point of weakness in or difficulty of a partner should be considered as a weakness or difficulty of the firm as a whole and therefore each and every partner should ungrudgingly come forward to lend a helping hand to remedy such a situation. It should be the constant and continuous endeavour of the partner even at the cost of their individual interests, inclinations and preference, to create and meticulously maintain a spirit of harmony and cohesiveness amongst themselves. Their relationship has to be based on mutual respect and reciprocity and, in case of need, of utmost restraint. Every partner has to defend his colleagues or the firm, with all the force at his command, in the event of any adverse comment from any non-partner - be that a client, a member of the staff or anybody else. Any reflection on the firm or any partner should be considered as a reflection on oneself. The firm can survive and make progress only on this basis. Individual professional competence will lose much of its value if it cannot be united and harmonised by a cohesive team spirit, which should be considered to be the biggest asset of the partnership. It has to be borne in mind that the ultimate strength of the firm lies in the collective strength of the partners.

66 The Legacy Continues... Post Independence Era S. B. Ghosh, Freny Bathena and P. K. Choksey

In 1975, I was sent to the UK and US on India. Following this, A. F. Ferguson & an international exchange programme Co started representing only Peats in and had the opportunity to work under this country. two of the giants at that time, M.D.Car in the UK and Dick Hammer in the I was inducted as a partner on 1st July, US – albeit for a limited period. Two 1981. By then, R N Sen had retired years after my return, in 1977, Price and P K Choksey had become the Waterhouse & Co and Peat, Marwick, senior partner. At that time PW had 19 Mitchell & Co decided in the UK not to partners. The names of the partners have a common firm representing both used to be printed at the bottom of in India. PW India had to choose and it the letterheads. All partners would decided to go with Price Waterhouse. meet first thing in the morning in the Consequently PW India so long called teak panelled board room in Gillander Price Waterhouse, Peat & Co changed House, to open all incoming mail its name from 1st July 1977 to Price and review all correspondence of Waterhouse & Co. Whatever little the previous day. I noticed that most nonresident interest that had remained, partners took soda (brought from ceased and it became a partnership Calcutta Club) as a matter of course with only Indian partners all resident in and I had to instruct the bearer not

Post Independence Era The Legacy Continues... 67 to serve soda every time I asked for tax office in Park Street. By then I had water. We had a sumptuous lunch already become the tax leader in PW every afternoon, cooked in the kitchen following M K Niyogi’s retirement in which was on the roof. The lunch was 1990. discontinued in mid 90s. The 1970s and 80s were difficult days In 1985, the Bonus Act was amended in Calcutta. The climate of labour making payment of bonus mandatory agitations led several clients to shift only for those drawing salary less than their headquarters to other States Rs. 2500. By that time, P K Choksey (e.g. Molins of India, Avery India, had retired and Kamesh Bhargava Brooke Bond and Metal Box). The had taken over as the senior partner. It nationalisation of insurance, banks, was before the pujas. The union was coal and petroleum denuded the client agitating for bonus. Kamesh Bhargava list. Jute had become sick and with put up a notice on the notice board in changes in ownership, both PW and the afternoon to the effect that bonus L&L lost many of their clients. The would be paid only as per the Bonus silver lining was the work which the Act and by implication, no bonus would firms started getting in neighbouring be paid to clerical staff drawing salary States / Countries. For example PW above Rs.2500, and left for Delhi. I was got substantial work in Nepal (e.g. the lone partner present in the office Helvetas, International Centre for that late afternoon and the clerical Integrated Mountain Development, staff gheraoed me. I was released Royal Nepal Airlines, Soaltee Hotels), only around 8.30 p.m. That was my (e.g. Helvetas, Royal Insurance first tiff with the union. 9 years later in Corporation of Bhutan, Unit Trust of 1994, I again had a conflict with the Bhutan, Druk Air, Bhutan Logging union in the context of the dismissal Corporation, Chukha Hydel Power, of a temporary bearer. That was when Royal Monetary Authority, State Trading I decided that I had reached my limit. Corporation of Bhutan), Bangladesh On 17th August, 1994, I shifted out (e.g. ICDDR and USAID jobs) and from Gillander House with the officers Orrisa (e.g. Protexa, Indian Oil). What of the tax department leaving behind saved the day, however, was the the clerical staff and set up the new introduction of tax audit by the insertion

Facing page: P. K. Mallik with Satyajit Ray on the sets of “Seemabaddha”

68 The Legacy Continues... Post Independence Era The Legacy Continues... 69 of Section 44AB in the Income-tax Act From 1st February 1986 PW India in 1984. All businesses with a turnover abandoned “& Co” and changed its exceeding Rs.4 million were required name to Price Waterhouse. to furnish along with their tax return, a separate certificate from the auditors Marc Meugens certifying various facts and figures (24th Sept 1880) which were necessary for a proper tax assessment. This added substantially Meugens & King to the audit revenue. (1884)

In the fall of 1984 we received news Meugens, King & Simpson that Price Waterhouse was in merger (1892) talks with Deloitte. One attraction of the Meugens, King & Co. merger was Deloitte’s association with (1910) SGV in Philippines and its associates in Japan. P. K. Mallik had informal Meugens, Peat & Co. discussions with Salil Gupta of Gupta (1917) Chowdhury & Ghosh which represented Deloitte Haskins & Sells in India at the Price, Waterhouse, Peat & Co. time. The merger however fell through (1921) because although PW US and Canada were in favour, PW UK decided against Price Waterhouse, Peat & Co. it. In the summer of 1989 we again (1940) received news of merger talks, this Price Waterhouse & Co. time with Arthur Andersen. Roy Rohatgi (1st July, 1977) then leading Arthur Andersen in India visited our office in Gillander House Price Waterhouse for informal discussions. I remember (1st February, 1986) him joining us for lunch in the lunch room. The merger talks were called off in September 1989 because Andersen Between 1987 and 1992, PW lost 3 had joint ventures with IBM and partners unexpectedly. M L Saha died Hewlett- Packard both of which were on 25th December 1987, K P Bhargava, audit clients of Price Waterhouse and the senior partner, on 20th April 1989 the merger would have meant giving up and P R Majumdar on 26th March 1992. either the joint ventures or the audits. On K P Bhargava’s death S B Ghosh took over the reigns of PW (after a short On the morning of 31st October interim stint by M K Niyogi). 1984, Indira Gandhi’s tenure as prime minister had came to an end with her assassination by two members of her security guards.

70 The Legacy Continues... Post Independence Era Regulations

The Chartered Accountants Act governance including the role of requires the auditor to be either a sole auditors. The Committee after hearing proprietor or a partnership of chartered the views of all stakeholders submitted accountants. The Companies Act limits a report to the government on 23rd the number of partners in a partnership December, 2002 rejecting the idea of to 20. Thus there is a statutory limitation rotation of audit and proposing rotation on size. of partners.)

In early 1970s the bogie of audit However, rotation continues in rotation was raised. It was debated at Government companies where the length and deliberated upon by the auditor is appointed by the C&AG. Joint Committee of the Parliament. The C&AG ensures that the auditors Apart from the representations are rotated in the case of Navaratnas made by the senior members of the every 5 years, mini-Navaratnas every profession, a representation was 4 years and non-Navaratnas every 3 also made by the Joint Committee years. Under the Banking Regulation of the Audit Firms’ Union, which was Act, appointments / reappointments formed for the purpose. Utpal Sarkar / removal of auditors require Reserve and Samar Dalal of L&L represented Bank approval. No audit firm is allowed before the Parliamentary Committee to audit more than 4 private sector on behalf of the Audit Firms’ Union. banks and 1 State owned bank. Bank The Parliamentary Committee rejected audits are rotated at least once in 4 rotation and recommended that a years. There has to be a cooling off ceiling on the number of audits would period of 2 years before an auditor achieve equitable distribution of audit can be appointed to audit the same work among different auditors and bank. Insurance is regulated by the simultaneously serve to dissociate Insurance Regulatory and Development auditors from groups of companies Authority (IRDA) and appointment of thus avoiding temptation to shield the joint auditors and rotation every 4 years shortcomings of the management. is mandatory. On the recommendations of the Committee, section 224 of the When the Chartered Accountants Act Companies Act limited the number of 1949 was enacted there was no of public company audits to 20 out provision for registration of firms. There of which not more than 10 could be were provisions for registration of the companies with a paid up capital of members. The existing firms continued 2.5 million or more. (Following the with their existing names. The Council scandals in the US, the Government set of the Institute however did not permit up the Naresh Chandra Committee in names which smacked of publicity. For 2002 to review the issue of corporate example a firm was asked to change

Post Independence Era The Legacy Continues... 71 Earlier Price Waterhouse and Lovelock and Lewes used to refer to associate firms on their letterheads its name from “True & Fair”. In 1983, Earlier there was no prohibition against the Council of the Institute however use of logos / monograms. A decision came out with a guideline regarding was however taken sometime in 1995 firm name. While protecting existing that logos unconnected with the first names, the guidelines provided that letters of the name of the firm / partners new names should be restricted only to should not be permitted since it would the name(s) of the proprietor / partners. amount to advertisement / publicity. Thus adoption of new foreign names One firm with partners called Kapadia, are no longer permitted. (Accordingly, Pereira, Makhijani and Girish started the audit firms Price Waterhouse and using the acronym KPMG. This was Lovelock & Lewes continue in their struck down by the Institute. old names in which they have been practising for over 100 years.) In 1997, the Institute decided that the use of logo / monogram of any kind / When I had joined PW, the letterhead form / style / design / colour whatsoever referred to the associated firms on any display material or media e.g. overseas. In 1995, the Council paper stationery, documents, visiting of the Institute decided that the cards, magnetic devices, internet, sign use of expressions / words “in board by chartered accountants / firms association with...”, “Associates of shall be prohibited. …”, “Correspondents of …”, on the stationery, letterheads, visiting cards Consequent upon these decisions, and other professional documents of the firms of chartered accountants PW firms of chartered accountants was not and L&L stopped referring to associate permissible. firms and using logos.

72 The Legacy Continues... Post Independence Era The Era of Reforms

1990s

As the country entered the 1990s it got its economic freedom in 1991. became abundantly clear that the Second, there was the worldwide socialist economic theories and policies merger of Price Waterhouse and had miserably failed and the economy, Coopers & Lybrand in 1998. Third, far from taking off as predicted by 1990s saw the rise of MCS, particularly the economists in the 1950s, was in PW and the unprecedented boom in virtually in a state of collapse. Most the other disciplines. public sector undertakings had not yielded the anticipated returns. The 1990s also saw the rise of women “licence raj” had made the industry in both firms. In 1992, Bharti Gupta dependent on the bureaucracy on what Ramola became an executive director to produce, how much to produce and in PW. In 1997, Usha Narayanan and where to produce. This had a crippling Sharmila Karve became partners in effect on growth. The stress on import L&L. These were a far cry from the old substitution had a negative impact on days when partners had hesitations the propensity to export. The high tariff in admitting women even as articled rates sheltering the Indian industry clerks. (L&L had created precedence had adversely affected the competitive when Purabi Dhar joined as the first instinct and the initiative to innovate. lady articled clerk in 1966. It was not The high tax rates had led to a large until 1972 that PW took its first lady black economy. articled clerk, Manjula Khastagir.) Satyavati Berera, Usha Rajeev and Three things changed PW and L&L for Anuradha Tuli became partners in ever. First, the minority government 1995, 1999 and 2000. In 2003, Latha led by Narasimha Rao came into Ramanathan joined as an executive power in the Centre and Manmohan director. Singh became the Finance Minister. Manmohan Singh initiated the Women now work shoulder to economic reforms and liberalization, shoulder with their male colleagues. which changed the course of India’s Anuradha Tuli’s experience bears economic history. India which had special mention. At the height of achieved its political freedom in 1947 insurgency she successfully carried

The Legacy Continues... 73 out a USAID assignment in Sri Lanka, her report being ultimately used at the International Court of Justice in The Hague. In 1989, she was involved in the audit of PL 480 food programme, another USAID project, visiting remote areas in Tamil Nadu and Andhra Pradesh, living in hostels meant for priests, auditing records on the bonnet of a jeep, in the middle of the field or under a tree and walking miles in the scorching tropical sun to reach the audit locations. Her report made the frontpage of the Washington Post (25th May 1990) and an article in India Today. She made 9 trips to Kabul in 6 months for a UN project involving land mine clearance, having her briefing meeting at the UN headquarters “which felt like I was being briefed for a military mission”, “having our entrance meeting with Afghan NGOs in an arms & ammunition museum”, “entering into my bathroom after a bomb blast only to find myself walking on glass” and having the satisfaction of the UN sending appreciation letters to each one of her team members for a job well done in excruciating circumstances.

74 The Legacy Continues... The Era of Reforms Bharti Gupta Ramola First Lady Executive Director of PW (1992)

Usha Narayanan First Lady Partners in L&L (1997) Sharmila Karve

Purabi Dhar Manjula Khastagir First Lady Articled Clerk in L&L (1966) First Lady Articled Clerk in PW (1972)

The Era of Reforms The Legacy Continues... 75 Reforms

24th July, 1991 was a milestone in 1st January 2000. The MRTP Act India’s economic history. On that day was repealed in 2002 and is being the licensing system was abolished replaced by a competition law. The except for 18 listed industries (which Petroleum Products Administered Price was reduced to 6 in 1998-99). Within Mechanism (APM) was dismantled in years the number of industries reserved 2002. Infrastructure sectors including for public sector was reduced from 17 roads, ports and airports opened up for in 1991-92 to only 2 (atomic energy and private participation. railways). FDI upto 51% was permitted under the automatic route in 35 priority Basically, what started happening sectors. In 1993, Foreign Institutional since 1991 was that the controls which Dr. Manmohan Singh, Investors (FIIs) were allowed to had been set up under the socialistic who initiated the purchase shares in listed companies. regime which followed independence reforms In 1998, procedures were simplified by were being slowly and consciously making the automatic route completely dismantled. The effect was that India free of any approvals and in 2000, was being unshackled. Foreign the FDI policy was revamped with investments started rolling into the the introduction of a negative list with country. New industries started being everything else qualifying under the set up. As areas previously reserved automatic route. The New Industrial for the public sector opened up to Policy of 1991 had announced a series private investment, new private players of exchange reforms to pave the way started coming into the scene. Existing to make the Rupee partly convertible. industries began to reorganize to face In 1992, the office of the Controller of the new situation. Simultaneously, the Capital Issues (CCI) was abolished and government sector also embarked the Securities and Exchange Board of on reforms (power taking a lead), India (SEBI) was upgraded as a fully institutional strengthening, and e- autonomous body. Electronic trading governance initiatives. Fiscal reforms in shares was introduced to improve ushered in Transfer Pricing and VAT. All transparency in establishing prices and these resulted in a substantial increase dematerialisation of shares eliminated in the work in all the disciplines. the need for physical movement and storage of paper securities. The National Telecom Policy 1994 heralded private sector participation and the Telecom Regulatory Authority of India (TRAI) was set up in 1997. In 1999, exchange control shifted from regulation to a management regime with FERA being replaced by FEMA. Pricing of coal was deregulated from

76 The Legacy Continues... The Era of Reforms Merger

On 18th September, 1997, the had been incorporated on 1st February 1999 in Price Waterhouse Associates announcement was made of the 1990 in Bombay called Coopers & Pvt. Ltd. which was renamed worldwide merger of Price Waterhouse Lybrand Pvt. Ltd. which was carrying PricewaterhouseCoopers Pvt. Ltd. and Coopers & Lybrand. PW had been on consulting business. In some of The audit firms Price Waterhouse and a member of the worldwide network of the larger territories the merger was Lovelock & Lewes and the consulting Price Waterhouse from the inception of consummated on 1st July, 1998. In company PricewaterhouseCoopers the network. From 1967 to 1993, L&L India, what effectively happened was Pvt. Ltd. became members of the was an associate of and since then a that, all the employees of Coopers & PricewaterhouseCoopers international member firm of Coopers & Lybrand Lybrand Pvt. Ltd. left that company and network. International. Separately, a company took up employment on 1st January,

First there was the Big 8

Arthur Andersen Arthur Young Coopers & Lybrand Deloitte Haskins & Sells Ernst & Whinney Peat, Marwick, Mitchell Price Waterhouse Touche Ross

Then it became the Big 6

Andersen Worldwide Coopers & Lybrand Deloitte & Touche Ernst & Young KPMG Peat Marwick Price Waterhouse

Now it is the Big 4

Deloitte Touche Tohmatsu Ernst & Young KPMG PricewaterhouseCoopers

The Era of Reforms The Legacy Continues... 77 78 The Legacy Continues... Price Waterhouse and Coopers & Lybrand

Price Waterhouse was founded on 24th Musserwanjee Tata, and the winding up firm was set up in 1919. In 1920 an December, 1849 by Samuel Lowell of the , a very interest was taken in the Indian firm. Price at 5 Gresham Street, London. In heavy matter of business which occupied During the Second World War, in March May,1865 he took as his partner William Holyland for some years entrusted to us 1946, the Price Waterhouse International Hopkins Holyland and Edwin Waterhouse by Messrs Freshfields as representing Firm was constituted to coordinate the and the firm was called Price, Holyland Bank of England”. various PW firms. Following a review by & Waterhouse. Interestingly, Edwin In 1871, Holyland retired from the firm McKinsey, in 1982, it was reconstituted Waterhouse recalled in his memoirs that and went on his own, undertaking a few as the World Firm with a more active in 1866 - private assignments (which included role. Michael Coates became the first “…the troubles of the Indian cotton trade the liquidation of the Commercial Bank Chairman. which followed a month or two later of India). From 2nd November, 1874, The comma after Price was dropped led to our taking charge of the affairs of the firm changed its name to Price, around 1940 and the “& Co.” was Dadabhai Naroji, a very interesting and Waterhouse & Co. In the 1890s, a firm abandoned in 1981. From then, it became virtuous Parsee merchant who failed was established in USA, in 1907 in Egypt Price Waterhouse. for a large sum, of those of Jamsetzee and in 1913 in Argentina The continental

William Cooper commenced his practice the English Institute respectively in 1883- At the time of the international merger of in 1854 in two rooms at 13, George 1884 and 1899-1901. Deloitte Haskins & Sells with Touche Ross Street, Mansion House, London. The in 1989 to form Deloitte Touche Tohmatsu, The International firm of Coopers & practice continued to be called “William Deloitte Haskins & Sells, UK voted Lybrand was created in 1957. This was Cooper” until 1857 when his brother against the merger with Touche Ross and the result of the combination of Cooper Arthur Cooper was admitted as a merged with Coopers & Lybrand, UK. Brothers & Co. (UK); Lybrand, Ross Bros. partner. From 1st January, 1858 the Deloitte’s correspondent firms in some & Montgomery (US); McDonald, Currie name changed to W.& A. Cooper and of the European countries also chose to & Co. (Canada); Despacho Roberta from 1st January, 1861, the name was affiliate with Coopers & Lybrand. Casas Altriste (Mexico); and Treuhand finally changed to Cooper Brothers & – Verinigung A.G. (Germany). The US In January, 1997, Coopers & Lybrand Co. Two more brothers, Francis Cooper firm continued to be called Lybrand, acquired Kwasha Lipton, the New Jersey and Ernest Cooper were admitted into Ross Bros. & Montgomery (effected based consulting firm and thus acquired partnership in 1871 and 1872. a successful merger with Scovell – expertise in the human resources Cooper Brothers built a successful and Wellington, a large second tier firm in the advisory area. It had similarly acquired highly reputed practice. Arthur Cooper US in the 1960s) and from 1973 changed real estate expertise through its merger and Ernest Cooper became Presidents of its name to Coopers & Lybrand. with Kenneth Leventhal.

PW had abortive merger talks with in most countries from 1st July, 1998 (Immediately following the announcement W.B. Peat & Co. in 1921, with Deloitte and PricewaterhouseCoopers came into of the merger, there was another in 1984 and with Arthur Andersen in being. Nicholas G. Moore of C&L became announcement of a yet bigger proposed 1989. The merger talks with Coopers the worldwide Chairman and James J. merger – between KPMG Peat Marwick in 1997, however, clicked. On 18th Schiro of PW became the worldwide CEO. and Ernst & Young. However, the September, 1997, Coopers & Lybrand At the time of the merger, the firms had a regulatory authorities did not have any and Price Waterhouse announced their combined revenue of $ 13 billion, 135,000 more appetite and the merger was called merger. The merger became effective employees and 8,500 partners. off in February, 1998.)

The Legacy Continues... 79 The rise of MCS

The accounting firms had, for tax aspects of the different assignments years, been doing special jobs like he did. He was an avid reader and a valuations of business and shares, great lateral thinker. He would come writing accounting manuals, advising up with out-of-the-box ideas which in connection with restructuring and seldom struck us. I admired his reorganizations, preparing project capabilities. Once he wrote a proposal reports in collaboration with technical in very difficult English putting simpler experts, raising project finance and the meanings in parenthesis after difficult like. For example, way back in 1966- words. This prompted the client 67, PW carried out large consulting to write back in similar fashion as assignments for the Calcutta Port Trust follows – “This alludes (refers) to the and the Bombay Port Trust. In the confabulations (discussions) I and Mr. earlier days, the audit partners would N. Das had at your workstation (office) do these in addition to their normal last week. Your offer (proposal) was audit routines. In the 1970s-80s, a need transmitted (handed over) to me along was felt for a more focused approach to with the chefs-d’oeuvre (masterpieces) such services. This was also prompted received from other maestros partly by the fact that in larger territories (experts) for phlegmatic (objective) separate Management Consultancy dactylonomy (analysis). Comprehending Services (MCS) divisions had been (understanding) the contents of your established to create dedicated teams overture (offer) was an endeavour with required specializations. Both the taxing the cerebral stamina (testing the firms, PW and L&L thus set up separate patience)…” MCS departments by transferring partners and recruiting staff. What changed things radically was a decision taken by the PW partners, In PW, Kamesh Bhargava, S.J. Dutt, mainly at the behest of Kamesh M.L. Daga, Atin Choudhury, Bhaskar Bhargava, to embark on information Banerjee and A.N. Sadhu were involved technology. Breaking away from the in the MCS department from time to traditions, culture and the mindset time. In L&L, Syamal Mitra and Bhuban of the past, he pioneered the idea of Basu looked after MCS. This resulted starting the business in a separate in dedicated marketing and after initial company. difficulties work started flowing. It was a tough and courageous We had to walk through the MCS decision. The reasons were manifold office to reach the Tax department. - (a) the limited liability nature of the Sometimes we worked together on entity appealed to the partners who assignments. A. N. Sadhu in particular were not certain regarding the success would always call on me to check the of the venture (b) the core business

80 The Legacy Continues... The Era of Reforms The Era of Reforms The Legacy Continues... 81 remained ring fenced (c) non chartered relinquished the global MCS leadership accountants could be admitted to to a Canadian partner Dick Mineau and the highest ranks of leadership and a assumed an Asia Pacific management CEO could be hired who might have role proved to be of big help. He took to be paid more than several partners, Roopen to the MCS leader of US, Tom even perhaps the senior partner and Beyer and Roopen struck the first staff (d) it would be free from the limitations augmentation contact at the Santa attaching to chartered accountants. Fe Railways, Topeka, Kansas where a team of Indians led by Anjan was sent Price Waterhouse Associates Pvt. to work on the large project. That was Ltd which had been incorporated in the beginning. There was no looking Calcutta on 20th March, 1983 was a back thereafter. vehicle readily available. Roopen Roy who was inducted as a partner in 1984, The practice was soon outgrowing was called by Kamesh Bhargava, the small office in Sukh Sagar. On directed to look after the IT business 19th July 1993 a ¼ acre of land was and told to sink or swim with it. He took acquired in Salt Lake (Plot No.Y-14) and a separate office in Sukh Sagar, Sarat construction of a 20,000 sq. ft. office Bose Road. Arnab Bhattacharya was building was started. The building was recruited as the CEO from Dunlop. completed in 1994 and the stone laying Roopen Roy (He had an IBM background and had ceremony was performed by Howard joined Dunlop when IBM withdrew Hughes, Managing Partner of the World from India in 1977 following a spat Firm on 10th November, 1994. MCS with the Minister, George Fernandes.) moved into the building. However, Arnab left after a while and all responsibilities for running and In the same year on 22nd April, growing the business fell on Roopen’s 1994 Price Waterhouse Lanka (Pvt.) shoulders. On hindsight this was the Ltd. was incorporated in Sri Lanka best thing that could have happened. with 51% of the equity held by Price Roopen started recruiting the best Waterhouse Associates Pvt. Ltd. and and the brightest - over the years they 49% held by Herman Amarasekara, included Jaydeep Mukherjee, Anjan a Sri Lankan national. The first local Mazumdar, Ambarish Dasgupta, manager was Janaka Dissanayake. Dr. Joydeep Dutta Gupta, Amitabh Ray, Ravi Corea took over as the manager Rajarshi Sengupta. after Janaka’s departure. (In 2004, PwC Sri Lanka purchased Herman Two IT jobs, one at Indal and the Amarasekara’s interest and following other at Calcutta Electric Supply were an issue of shares, PwCPL India’s stake obtained and the IT business was on its was reduced to 45%.) way. Meanwhile, Dick Wheaton who had

82 The Legacy Continues... The Era of Reforms In December 1995, Jim Schiro, then the US that the project demanded. senior partner of PW US firm, visited 1996 also witnessed the start of the Calcutta along with his deputy Woody relationship between PW India and PW Brittain. The terms of a cooperation US GTS (now US IT) and a team of agreement between PW India and PW Indians started working onsite at Tampa US was agreed. (The agreement was covering a range of Oracle Applications actually signed later on 31st March (Financials), Data Warehousing, 1996 incorporating the understanding PeopleSoft and technology support. reached during Jim Schiro’s visit.) While There were also the large custom the agreement was comprehensive, software projects of PW US in Colorado in practice it helped MCS the most and Idaho in which PW India was bringing the Indian MCS in closer involved. Also in1996, the Technology relationship with the US MCS. The fact Forecast series was launched in India. that Woody had a MCS background helped. By 1997, a five storied 35,000 sq. ft. building was constructed on the In May 1996, the SAP CBT project was adjacent land (Plot No.Y-2 which started. It was a 40 man years effort was acquired on 2nd March 1995 centering around developing SAP in anticipation of expansion) and course content in CBT formats which got occupied. 1997 saw the growth PW was jointly marketing with the of the ERP practice in PW. A niche Gartner Group, out of 4 global locations product for the power and utility sector in Calcutta, Shanghai, in India and South East Asia called and Philadelphia. That developed the EmPower was developed jointly with core SAP practice of PW India. It also Oracle and the Data Warehousing and resulted in the direct connectivity with Business Intelligence group and the PeopleSoft practice started. 1998 to 2001 witnessed consolidation of the practices. Following the international merger of Price Waterhouse with Coopers & Lybrand in 1998, the name of the company was changed to PricewaterhouseCoopers Pvt. Ltd. on 22nd September, 1998.

With the internet era and the start of the

dot.com boom the practice witnessed Facilities built in Salt lake to strong growth in offshoring as well as accommodate growing numbers the domestic market. These years also From the top Y14(1994), Y2(1997), X1-7(2001) saw the doubling of the bandwidth

The Era of Reforms The Legacy Continues... 83 linking India with the US. There was contemplated a global IPO of the MCS significant increase in the work done for business, with the name “Monday”. (In the PwC Global Network, GFS (Global the context of an IPO, Kotak Securities Financial Systems) and GO (Global which was an affiliate of Goldman Office). On 22nd October 1997, a 1 Sachs valued PwC India’s consulting acre plot (Plot No.X1-7) was acquired business at between $105 and $130 for construction of a third building million.) However, before the IPO could which was completed in November, take place, a deal was struck at the 2001. global level with IBM. Since all the territories sold their consulting business During 2000-2002, the regulatory to IBM, PwC India also divested the environment took an ugly turn following consulting practice to IBM India along financial scandals in the US. It was no with the building and facilities at Plot longer possible for accounting firms No.X1-7 on 30th September, 2002. to run consulting business globally in the format, as before. In 1989, Arthur A new journey began. It was realised Andersen and Andersen Consulting that IT competency was necessary not had become separate units of only to support the other practice areas Andersen Worldwide and following an of the firm, but also to support PwC arbitration award, Andersen Consulting globally in its in-house IT requirements. split from Andersen Worldwide on Also, it was possible to provide a 1st January 2001 changing its name number of services strictly within the to Accenture. (On 15th June 2002, a limitations of the non-compete clause judgment was given against Arthur which PwC had globally negotiated Andersen for obstructing justice in with IBM. This resulted in the building relation to the investigation of Enron up of the iSDC (India Solution Delivery following which it surrendered its Centre) with a contingent of highly license and right to practice on 31st skilled IT professionals, who now serve August 2002.) Meanwhile, Ernst & PwC globally. The iSDC also does off- Young had sold its consultancy division shored work in connection with audits to Capgemini in May 2000 and in 2001 of the Birmingham Office of PwC UK KPMG had divested its consulting firm and mutual fund audits of PwC France. through an IPO of KPMG Consulting The iSDC has the Det Norske Veritas’ Inc, which is now called BearingPoint, ISO 9001- 2000 + TickIT certification, Inc. the BS 7799 Certification and in March 2005 has been assessed at the highest In the above atmosphere, PwC level of quality certification – CMMi first had abortive talks with Hewlett Maturity Level 5. Packard for sale of its consulting division. Thereafter, PwC worldwide

84 The Legacy Continues... The Era of Reforms The Era of Reforms The Legacy Continues... 85 86 The Legacy Continues... The Era of Reforms Not IT alone

It was not just IT alone. The 1990s Foley (a partner from the London CF witnessed growth in all the other practice who came on secondment practice areas. The demand for a wide for 2 years in 1995) based in Bombay, range of services received impetus initially concentrating on transaction with the opening up of the economy as advisory and valuations. The focus multinationals started being drawn to was extended to project finance when India. They called for advice on a broad Bharti Gupta Ramola joined the group. variety of subjects related to doing Subsequently, they started conceiving business in India such as potential and implementing restructuring partners, location decisions, market solutions for large Indian groups/ studies, business plan preparation or companies. Meanwhile, the Transaction review, structuring assistance, entry Services practice headed by Deepak strategy, valuations, joint venturing and Kapoor started booming with a large regulatory and taxation advice and number of assignments for due assistance. Many clients seeking to diligence and assistance in connection set up business in India, wanted their with M&A transactions. The merger of hands held right through the entire CF with Transaction Services in 2003 process. These generated substantial has created additional synergy. work for the tax and the non-IT MCS. Also the authorities sought professional The IFE practice received the initial help for attracting investment. boost when PW got the Institutional For example the Industry Ministry Strengthening Project of the Orissa approached PW to do a comparative State Electricity Board in 1994. (It was study on foreign investment policy initially in the context of that project environment for select countries and a that a wholly owned subsidiary, similar comparative study on industrial Price Waterhouse Development promotion zones. Both were published Associates Ltd. was formed in by the Ministry. London on 31st October, 1994. The name was subsequently changed to In 1994, PW India took a decision to PricewaterhouseCoopers Development set up a Corporate Finance practice. Associates Ltd.) Namasivayam took (This was not something new – years charge of the Orissa project in April ago, in the 1960s R N Sen had 1995 replacing Saumen Ray. This was worked and appeared on behalf of a large project, involving at its peak the government in the Sahu Jain case more than 150 consultants and ran for which was essentially a valuation and several years. The expertise gained compensation dispute.) Ashwani Puri on the back of this project led to the went to London for training. The CF specialisation in power and under practice was set up on his return with Namasivayam’s leadership, the power Ashwani based in Delhi and Martin group started winning large power

The Era of Reforms The Legacy Continues... 87 88 The Legacy Continues... New iSDC building at DN 56-57 Salt Lake, Kolkata, to be dedicated to staff and clients in 2005

The Legacy Continues... 89 sector reform projects in the other As MNCs started setting up assurance practice moving out to Salt States. Along the way, work started subsidiaries in India, there was a Lake in mid-February 2002. The unions coming in sectors other than power significant increase in the assurance have disappeared with attrition and including privatisation and financial and client lists of PW and L&L. The growth voluntary retirement payments. A new fiscal reforms of the State Governments has been phenomenal. All assurance iSDC is under construction in the 2 and Agencies. The practice was partners in PW and L&L have ever acre plot (DN 56 & 57) in Salt Lake with rechristened as Government Reforms since been up to their neck with work. large training facilities and to house and Infrastructure Development (GRID) To name anybody to the exclusion of the increasing numbers, scheduled for and got a boost when Amrit Pandurangi another would be unfair. In 1998, the dedication to the clients and staff in this and Latha Ramanathan along with new PwC Audit Approach was adopted 125th year. their team joined from KPMG in 2003. with TeamAsset as the execution, The Business Solutions practice led documentation and review tool. In 2003 Necessarily, the post liberalisation by Joydeep Dutta Gupta also started this was upgraded and TeamAsset was period, since 1991 has been a period of growing. A number of e-governance replaced by MyClient. 1000 assurance seeking more and more office space to projects were won by Neel Ratan. The professionals had to be trained in 100 cope with the increasing numbers and same situation prevailed in GRMS days involving 70,000 man hours of the increasing work. PW and L&L had spearheaded by Sanjay Hegde and training. earlier experienced a quantum jump Kaushik Dutta. Kaushik later went back during the inter-war boom of the 1920s- to assurance. As new expertise and new areas of 1930s. The quantum jump in business business developed, some of the old post 1991 far exceeds all historical Tax also witnessed explosive growth businesses which had historically data. I have been fortunate to be a part with Nityanand Gupta spearheading developed and which were no of it first as the tax leader, then as the Delhi till March, 2003 and as tax longer profitable were wound down managing partner and finally as the leader from 1st April, 2003. It was a or divested. Thus, work relating to Chairman and CEO of PwCPL from 1st concerted effort by all working as teams managing of provident and pension April 2003. led by Rajan Hingwala supported by funds were given up and the secretarial Subhankar Sinha in Mumbai, Indraneel department was closed down. Similarly, Roy Choudhury in Bangalore, Somnath the business of registrar and share Ballav in Kolkata, Sivasubramanian transfer agents which was being carried in Chennai and Ashlesh Verma in on in Choksey Bhargava & Co. was Hyderabad. Vivek Mehra led the charge divested to Duncans Software Ltd. in for regulatory advice and assistance. 1994. In 2003, the business of credit The indirect tax practice was started card processing and other outsourcing with the induction of S Madhavan and operations was divested to iSmart. when transfer pricing was introduced, Shyamal Mukherjee took charge and In the midst of all this, the offices at with the assistance of Keith Sparkes Gillander House and 4 Lyons Range (a TP specialist on secondment from which were taken in the first decade of London) built a substantial TP practice. the twentieth century by the expatriate partners were given up following the

90 The Legacy Continues... The Era of Reforms Epilogue

The world of professional accountants In the early days, the expatriates changed forever with the enactment used to return home to the UK retiring of the Sarbanes Oxley Act in the US from the Indian partnership and following scandals like Enron and leaving the Indian firm in the hands WorldComm. One of world’s largest of the remaining partners. This set accounting firms, Arthur Andersen a practice and process of continuity imploded and has ceased to exist. of the profession in the firms as they Regulatory bodies in other countries got transferred from one generation are emulating the US, some in a more to the next. As newer and younger extreme fashion. The Eighth Directive blood replaced the old, the firms lived is due in the European Union. Over the and changed with the times growing last few years, the regulatory ambience with enthusiasm and initiative at every in India became increasingly difficult step when a new generation took following virulent propaganda against on the mantle. The relay continued, the large accounting firms (who are each new runner trying to run a little members of international networks) by faster. Partners in PW and L&L and Author with Samuel A. DiPiazza, Jr. the Swadeshi Jagaran Manch. These executive directors in PwCPL have CEO of PwC Network led to a decision to remain above all always been trustees during their controversy and the partners of PW period of ownership and they have and L&L as a matter of risk mitigation, always endeavoured to leave behind divested all the shares they held in an organization stronger and bigger PwCPL by 2003. than the one they had joined. This has made these organizations what they are Today the audit firms PW and L&L and today. It has been a great legacy. The the consulting company PwCPL are legacy continues … wholly owned and managed by Indians in India, each separately a member of the PricewaterhouseCoopers worldwide network and proud of their heritage spanning 125 years of this country’s history.

The Legacy Continues... 91

Appendix

Other Offices

The Legacy Continues... 93 Madras

R. S. Arthur was the senior partner partner Arthur himself and later by his of L&L at the time of independence. partner Bhatty until Premanjan Niyogi For years, L&L had important clients became partner. Niyogi returned in the South which used to be served to Calcutta around 1958 and for a by visits from Calcutta e.g. Parry & period the branch was overseen Company (managing agents for East from Calcutta by John Laing until R. India Distilleries & Sugar Factories Balasubramanian became the first Ltd), Deccan Sugar and Akhbari home grown partner in Madras in 1964. Ltd, Secretaries and Treasurers On the latter’s retirement in 1984, K. for Travancore Ltd and Spencer & Ganesan relocated to Madras from Company Ltd. In 1947, on Arthur’s Calcutta. B.R. Vaithiswaran had joined initiative L&L set up a branch in Madras, as an audit manager in 1982 and had initially taking a temporary space in become a partner in 1985. He took Dare House (Parry & Co building) to over the reigns from Ganeshan in recruit people and then moving into 1990. On Vaithiswaran’s retirement in a proper office in Mercantile Building 1998, Ramesh Rajan relocated from (now The Hongkong Bank Building), Bangalore to take charge. First Line Beach (now Rajaji Salai). Stewart Smith, a Senior Qualified In August 1995 the L&L office had assistant, was the first Branch-in- shifted to Whites Road, Chockani charge. In 1951 on his retirement he Towers, and in June 1997 was succeeded in that capacity by from there to 98A, R. K. Salai, Aurora Premanjan Niyogi. Corporate Centre, Mylopore – next to the building which used to be the The Madras office was also responsible residence of the renowned philosopher for serving clients in Cochin (Madura Dr. Sarvapalli Radhakrishnan who was Company Pvt. Ltd. of the Mackinon the first Vice President of independent Group, Forbes Ewart & Figgis, India and later the President after Dr Carritt Moran), Bangalore (Automatic from 1962 to 1967. Telephones & Electric Company Ltd.), Hyderabad (Ripley & Co of the Mcleod PW set up its branch in Madras 16 Group and Vazir Sultan Tobacco years after L&L, in 1963. In those days Company) and the erstwhile Central PW (which had offices in Calcutta, Provinces (Manganese Ore Ltd., Cawnpore and East Pakistan) had an Nagpur). Interestingly, initially, it was understanding with A. F. Ferguson & also responsible for the branch audits Co (which had offices in Bombay and of Remington Rand and Mackinon & Delhi) that they would not encroach in Mackenzie in Bombay. each other’s territory and they referred work to each other on referral fee The Branch used to be supervised sharing basis. A feeling evolved within from Calcutta initially by the senior PW that they could pre-empt their

94 The Legacy Continues... Appendix stake in the south by opening offices in Estates, Thiashola Tea Estates and phases from 2002 and Mount Road Madras and Bangalore. In any event, Madras Annamalai Tea Estates. office was finally given up in 2003. there was pressure from Tractors and Subsequent additions included Farm Equipments (TAFE belonging to Harrison Crossfields, Bimetal Bearings, In 2005 both PW and L&L shifted from the Simpson Group) an important audit Amalgamation Repco, TI&M Sales and Aurora Corporate Centre to a brand client to set up an office in Madras with Needle Industries. new office in 32, Khader Nawaz Road, promises to give further audits from . within the group. An advertisement was Mohit Niyogi returned to Calcutta given in the Newspaper through TAFE in June 1973 to take charge of the The name of the city had changed to and based on the responses R. N. Sen tax department. He was succeeded Chennai in 1996. travelled to Madras and selected the successively by S. J. Dutt, A.K. office at 610 Mount Road (now Anna Chaudhury and Sankar Datta. Salai). Mohit Niyogi became partner With increase in activity two home in July 1963, relocated to Madras and grown partners were added N. PW’s Madras office became operational Sivasubramanian (1991) and J. Sekar from July 1963. (1997). Tax practice started in 1983 and Sivasubramanian was part time Apart from TAFE the other clients in tax until he shifted full time to tax in in those days included Tea Estates, 1992/93. The office shifted from Mount English Electric, Daverashola Tea Road to Aurora Corporate Centre in

Appendix The Legacy Continues... 95 Bombay

L&L started their Bombay office in SBG recruited P N Ghatalia (nephew of 1961 at Elphinstone Building, Veer S V Ghatalia whose book on auditing Nariman Road sharing an office with was the standard text book for the Brandon & Co. Samir Ghosh became CA examination). Ashutosh Sen was a partner in L&L on 1st October, 1964 transferred from Calcutta and took and shifted to Bombay in 1965-66. The up residence in Ishwar Bhawan in the main clients were Rallis India, Philips Malabar Hills which also served as the India and Britannia Biscuits apart from office. Operations were also directed branch audits. Samir Ghosh returned from the auditor’s office of Burmah to Calcutta due to his father’s illness Shell. Apart from Burmah Shell, other in 1967 when he was replaced by D clients included the branches and G Rajan, from Calcutta. DGR was a factories of GKW, Indian Aluminum, keen sportsman and had considerable Metal Box and Century Enka in Pune. business acumen and professional Following Ashutosh Sen’s return to competence. Soon he became known Calcutta, A N Sadhu and later T Ray in the business and social circles. He were temporarily resident partners in shifted the office to Wavell House (later Bombay till S B Ghosh who had gone known as Mahindra Spicer Building to the UK returned in 1977 and took and now called Dubash House) in charge. Meanwhile, the auditor’s office Ballard Estate. Business prospered and in Burmah Shell had to be closed down Bhikhalal Shantilal Trivedi was admitted following its nationalisation and the first as a second partner in Bombay in 1973. regular office of PW had been taken up By then, a management consultancy in 1974 in Bajaj Bhavan, Nariman Point. division had been started in 1970 with a number of consultancy jobs in the It was under S B Ghosh’s leadership Sultanate of Oman and J Rajagopal that the Bombay office of PW began was taken in as a senior consultant. to prosper significantly. Soon, it made In 1984, DGR returned to Calcutta to a name in the financial and banking replace K Ganesan who was moving sectors with a large number of clients. over to Madras. T V Thyagarajan (who Ghatalia was inducted as a second had become a partner in Madras in partner in 1978 and in 1980, a bigger 1980 and for a temporary period shifted office was taken in Raheja Chambers, to Delhi) replaced DGR in Bombay. Nariman Point. Kersi Vachha was inducted as a third partner in 1985 (his In 1966-67, PW was carrying out father Homy Jamshedji Vachha was a major consulting assignment for the senior partner of A. F. Ferguson & Bombay Port Trust which necessitated Co. from Nov 1964 to Oct 1971 and his S B Ghosh to be stationed there for grandfather Jamshedji Bejan Vachha about 2 years. Burmah Shell, then a was the first Indian Commissioner of big client headquartered in Bombay, Income Tax during the British Raj). was pressing for permanent audit staff.

96 The Legacy Continues... Appendix Meanwhile, exploration/drilling activity It was 1990s which saw the explosive increased in the Bombay High and tax growth. It was a story of huge work started coming in from foreign expansion which necessitated taking companies like Salvation Offshore and more and more space, – Tulsiani Viking Offshore. That was the tipping Chambers, Nirlon House, Kamala point for Bombay tax. Bharat Raut was Mills and additional space in Raheja recruited for taxation work and Rajen Chambers. Hingwala had dual responsibility for audit and tax. An office was taken Coopers had their offices in Sandoz at 1104 Dalamal Towers, Nariman House and Shah & Nahar, Worli. In Point. Both Bharat and Rajen became 1999, there were offices in 9 different partners in 1986. Bharat subsequently locations. In 2005, all offices were given left to set up his own practice which is up and everyone moved to one office in now a part of KPMG. MCS started when Shivaji Park. N Suresh was transferred to Bombay from Delhi in late 1980s and an office The name of the city had changed to had been taken in Asea House, Ballard Mumbai in 1996. Estate from where it shifted to Khar.

Appendix The Legacy Continues... 97 New Delhi

In 1964, L&L rented a small office and sent a telegram to Calcutta from at Gulab Bhawan, Bahadur Shah the Parliament Street Post Office Zafar Marg. It started carrying out stating, “Himalayan problem solved”. locally the branch audits of Gestetner, Soon Sujan Sen, K C Srivastava, M K Blackwood Hodge, Spencer, Parry, Raha, S P K Shukla were transferred ICI and Macneill & Magor. Within 2 from Calcutta. That was the beginning. years, L&L had outgrown the office and I C Mittra, M L Saha and M L Daga shifted to Hamilton House, Connaught had successively been in charge of the Place. A number of senior managers office initially until Amal Ganguli settled / partners from different offices were down in Delhi. transferred from time to time to manage the operations – Deva (1964- Work and office expanded rapidly. 65), N C Chakraborty (1966-68) Sujit Additional space had to be taken at Bhattacharya (1968-72), M K Banerjea Sagar Apartments in Tilak Marg in (1972-74), Thyagarajan (1974-79), 1978, Padma Towers, Rajendra Place in Ratnam (1982-84), P N Ghosh (1984- 1980 and Vandana Building at Tolstoy 98). The office prospered over the years Marg in 1990. Around 1990, The Tax and additional space had to be taken in department moved to Gandharva Antrikish Bhawan in 1992 and Adishwar Mahavidyalaya at Rouse Avenue which at Feroze Shah Road and Shriram Bhartiya Kala Kendra were added in 1995. Kaushik Dutta was inducted as a partner in 1994.

In May 1970, PW sent Arun Chatterjee, a senior manager, to Delhi. He set up a small office occupying around 100 sq. ft. inside a client (Mr. Vadera’s) office in New Delhi South Extension Part II. Among the first recruits was Nityanand Gupta. Almost immediately, Arun Chatterjee was on the look out for a proper office. An office in Himalaya House was located but the landlord was dilly dallying. Around July / August, I C Mittra arrived from Calcutta, sealed the deal with the landlord

98 The Legacy Continues... Appendix was augmented by additional space at made to consolidate following which Sucheta Bhawan. The fragmentation various offices were given up and of offices was making operations the practice is now housed largely in inefficient and in 1997 around 12,000 Saket, with the tax in Sucheta Bhawan sq. ft. was acquired in Saidulajab, and the back office in Gandharva Mehrauli Badarpur Road, Saket and Mahavidyalaya. both Padma Towers and Vandana Building were vacated.

Delhi is a story of astronomic growth due to the initiatives of the homegrown Delhi partners. This had resulted in a number of offices in different locations to keep up with expansion. Coopers had their office in Copernicus Marg. After 2003, a concerted effort was

Appendix The Legacy Continues... 99 Bangalore

PW Bangalore office was started in The first proper office was taken on in Calcutta tax department was January, 1974 by arrangement with the 24th January, 1983 at 4606 High Point transferred to Bangalore to take charge client Monotype Corporation to use IV, 6th Floor, 45 Palace Road, next to of tax. He took new space in the same two of their rooms, located in Church the High Ground Police Station. Sagar building on the 14th Floor. Thereafter, Street off Brigade Road. From October Datta became a partner in 1988 and the tax department witnessed 1974, PW became co-tenants of the shifted to Bangalore. In August, 1988, phenomenal growth. The MCS division same space with Macmillan India Pvt. a large office space of about 4100 sq. of PwCPL had its office in Indira Nagar. Ltd. On 15th November, 1977 the office ft. was taken at St Patrick’s Business Consequent upon the transfer of that was shifted to Room No.15, Hotel Complex, Museum Road and converted office to IBM in October 2002, PwCPL’s Kamadhenu, Annexe, Trinity Circle. into a modern office, where the office advisory division moved its office to the However, all these were essentially shifted. 7th floor of Mittal Towers. offices for receiving mail only and audits were carried out by staff sent Meanwhile, in 1988, Ramesh Rajan of from Madras office. J. Sekar, then a L&L was transferred to Bangalore from trainee, was transferred to Bangalore in Madras and on 19th August, 1988 he 1977 and the divisional office of Avery took up residence at 422, 4th Block, India Ltd. at Shivaji Nagar started being Koramangala which served as the used as a communication office as the office cum residence. In 1989, a proper divisional accountant R V Ramani was office was taken by L&L in Copper familiar with most of the staff and also Arch building on Infantry Road. Around incidentally shared an apartment with that time, N V Sivakumar returned to Sekar. In those days PW was carrying India after a stint with the Muscat office out a large consulting assignment in and joined as an Audit Manager. K R Bangalore for MetChem Canada for Girish who was working as Taxation which Jiten Dhar from Calcutta was Manager with Bata, also joined L&L as stationed there, living in an apartment Tax Manager. Towards the end of 1993, opposite Mount Carmel College the office shifted to a larger premises in (a popular ladies college). Around Mittal Tower, 14th Floor. the time Jiten Dhar was concluding the assignment, Maloy Sengupta With the opening up of the economy transferred to Bangalore in November, in 1991, Bangalore became a desired 1982 following the closure of the location for industry, especially Digboi office and took up residence software. There was explosive growth in in the same apartment. A room in that both PW and L&L. In 1999, PW shifted apartment started being used as the its office to 10th floor of Mittal Tower in office. The key clients in those days MG Road to be in the same building as were Monotype, GKW, Graphite India, L&L. Usha Martin Black, Reckitt & Coleman and Indal. On 27th January, 1999, Indraneel Roy Choudhury then a Senior Manager

100 The Legacy Continues... Appendix The Legacy Continues... 101 Pune

PW had a number of clients in Pune – Century Enka, Chloride India, Alfa Laval, Mather & Platt, Mahindra Engineering & Chemical Products Ltd. These were serviced from Bombay. Over the years this was proving inconvenient and in 1979, the Pune Office was set up at Yerawada. Anita Utamsingh was the Manager and she was helped by 2 qualified chartered accountants and 2 articled clerks, all locally recruited. As with all other offices, business and staff began to increase significantly and soon outgrew the office. In November, 1993, an office was acquired in Century Arcade, Narangi Baug Road and the office shifted there. It was renovated into a first world office in 2003. The space has been augmented in 2005.

102 The Legacy Continues... Appendix The Legacy Continues... 103 Hyderabad

L&L had big clients e.g. VST which 416 Himayat Nagar. Soon the practice used to be serviced out of Madras outgrew the office and in 1998, it or Calcutta. In 1986, D G Rajan, then shifted to L.B. Bhavan, Somajiguda. senior partner of L&L, decided to set The number of clients increased up a local presence in Hyderabad significantly and with Satyam adding considering the growth potentials in to the client list, the L&L Hyderabad that region. S R Batliboi & Co., A.F. branch became bigger than all the Ferguson & Co. and S B Billimoria & competitors in the city. After 1999, Co. already had offices in Hyderabad PwCPL opened two offices in the same tapping into the local market. S. building, one led by Ashlesh Verma Gopalakrishnan, a Manager from who heads the tax division and the Calcutta, was relocated to Hyderabad. other by Kameswara Rao who is in the He took on rent B-51, Skylark advisory practice. Apartments, Basheerbagh which served as his residence cum office. N V Sivakumar who had recently qualified as a Chartered Accountant from the Madras office was transferred to Hyderabad and a trainee accountant S S Mirza was appointed. That was the beginning of the Hyderabad Office. Business prospered and in 1993, the office was shifted to Lingapur House,

104 The Legacy Continues... Appendix The Legacy Continues... 105 Bhubaneshwar

C&L in association with L&L had consultants working on the project out conducted a study for CII on the of which about 30 were expatriates. investment prospects in Orissa and Howard Digby Jones used to spend on the back of the study, L&L had set about 50-75% of his time on the project. up a small office at 26, Forest Park, To house the consultants, a number of Bhubaneswar in October 1994, to guest houses had to be maintained, service local industries like Nalco, OMC three in Bhubaneswar, one in Cuttack, and Ortel Communications. one in Rourkela, one in Jajpur Road and one at Balasore. At the peak, sixty In the same year, PW got the ambassador cars were on hire. Institutional Strengthening Project of the Orissa State Electricity Board. This was As the project reached its completion, a very large project. Operations started the project office was shifted to IDCOL initially from the Oberoi Hotel (now House in May, 1995. In January 2001, Trident Hilton) and in January, 1995 the L&L shifted to this office giving up the project office shifted to 2nd floor, Orissa office in Forest Park. Consruction Corporation Building, Unit – 8. Namasivayam, replacing Saumen Ray, transferred to Bhubaneswar from Madras in April, 1995. At its peak, 1997-98, there were more than 150

106 The Legacy Continues... Appendix References and Acknowledgements

In Clive Street – R. N. Sen

True & Fair – A history of Price Waterhouse - Edgar Jones

Calcutta – a cultural and literary history – Krishna Dutta

Calcutta – the city revealed – Geoffrey Moorhouse

India’s Struggle for Independence – Bipan Chandra, Mridula Mukherjee, Aditya Mukherjee, K N Panikkar, Sucheta Mahajan

India After Independence 1947-2000 – Bipan Chandra, Mridula Mukherjee, Aditya Mukherjee

India Unbound – Gurcharan Das

History of Accountancy Profession in India – Vol I & II - ICAI

The Oxford History of Indian Business – Dwijendra Tripathi

The Lion and the Tiger-Dennis Judd

A historical perspective on mergers and acquisitions by major US accounting Firms – Charles Wootton, Carel M. Wolk, Carol

Normand

The Bengal Chamber of Commerce & Industry

The Tinplate Company of India Ltd.

Ian Lovelock, great grandson of Arthur Samuel Lovelock

Inputs from partners / executive directors / employees of PW, L&L and PwCPL

PW, L&L and PwCPL records and archives

Barsha Sanyal

Gargi Banerjee

Lorraine Alford

Devasis Goswami Top: Lovelock & Lewes in 1890 Sitting in the second row, 3rd from left - Arthur Samuel Lovelock and to his Left is John Herbert Lewes. Back Cover: The old Ratner Safe in PwC heritage room