How to Be a Billionaire??? How Binod Chaudhary built Nepal's first billion dollar business empire

answer
most read

Nov 13, 2017-The only Nepali listed as a billionaire by Forbes magazine, Binod Chaudhary has developed a massive business empire that spans 120 countries—mainly in the snack and beverage, hotel and real estate sectors. Recently confirmed by Nepali Congress (NC) to be its Proportional Representation (PR) candidate for the upcoming elections, Chaudhary is planning on espousing a pro-business platform in Parliament. The expansion of special industrial and economic zones that provide resources for businesses that go beyond mere tax breaks and allowing Nepali companies to invest and expand abroad are at the top of his agenda. Akhilesh Upadhyay and Mukul Humagain discussed with Chaudhary his political ambitions, his investments abroad, and the potential conflicts of interest that may arise from him being both Parliamentarian and an investor of international renown.
You have been recognised nationally and internationally as a successful businessperson. Why the sudden switch to politics?
I will employ all that I have learnt in entrepreneurship and management over the years to help me in my political endeavours. In the future, I plan to take a more of a back-seat role in terms of my business activities. I believe that in order to ensure a successful political future in the long term, a definitive line has to be drawn so as to isolate myself from business activities while in public office. My ethical standards would require me to do so.
The question in our minds is that you could have gone out and helped the nation in various other ways. Why choose politics specifically?
I believe that only entrepreneurship can bring about positive development in a country. Entrepreneurship and innovation are needed in governance too. I’ve been lucky to have been a part of organisations such as the Federation of Nepalese Chamber of Commerce & Industries (FNCCI) and the Confederation of Nepalese Industries (CNI) and I am proud of the work I did there. I am also proud of my time as a Constituent Assembly member. I represented a pro-business, pro-personal property stance in the House. My experience has taught me that, with a sensitive group of policy makers, the efficacy of any institution will grow. If you need to bring about any large-scale changes, politics is the way to achieve it.
We hear stories of you micromanaging everything at CG, up to the point that you’re involved in each and every transaction above Rs100,000. The micromanaging Binod Chaudhary, who has not decentralised management at CG yet, is now claiming that he will let go of control of his company. Will you actually completely give up your business?
Today, the scale of operations at CG makes it impossible for me to keep track of everything—including cheques and transactions—even if I wanted to. I work in three capacities at CG: one, I’m a gifted dealmaker; two, I can chart the future, including foreseeing how problems pan out over time; three, at the moment I’ve taken the role of bringing discipline into the company.
If I see a major catastrophe brewing at CG, I am obviously not going to sit and watch it collapse. I’ll also advise if I see a major opportunity. What you refer to as micromanaging, I see as bringing discipline to CG. And this is what I will be giving up as I step into the field of politics.
We see a trend of more businesspersons coming into Parliament, either from First-Past-the-Post (FPTP) or Proportional Representation (PR). Now, we have already witnessed issues, such as the Health Profession Education (HPE) Bill being obstructed by medical college investors. This is the very definition of conflict of interest.
I already have a track record of being in Legislature-Parliament without any conflicts of interest. While there is definitely a danger of distortion of interest areas, you cannot generalise this trend. You can also find MPs from non-business backgrounds that have had conflict of interests. We have to make Parliament and its workings more transparent, and the onus is on the media to expose people when conflicts of interest occur.
Why did you switch from UML to NC?
I never left UML because I was never a member of UML. I was only a member of the CA through them. My term ended in 2013, and I stayed away for the next four years. I did flirt around with the idea of establishing my own party, or joining one of the newer parties. However, I am an impatient man—I did not see the appeal in starting a party and growing it from scratch.
I am proud to have worked with great Nepali Congress leaders such as KP Bhattarai, Mahendra Narayan Nidhi and GP Koirala through the various positions I held at FNCCI and CNI in the 90s. The 1990 movement laid the groundwork for important changes, such as doubling of exports and setting up of major private companies like Dabur. So the NC is not new to me, I’ve always admired it. Whatever change we need to sustain future economic growth, I’m convinced it can be achieved through the NC and the Democratic alliance.
So you are joining NC because you like their economic policies better than the UML’s?
In the past 27 years, even when we’ve have numerous government changes and governing mechanisms have eroded, the growth that we’ve witnessed in Nepal has been due to the application of free market principles—and this paradigm was set in place by the Nepali Congress. So, I’m convinced that if anyone can take it to the next level of economic growth, it is the Democratic parties and Nepali Congress.
In your autobiography, My Life : From the streets of Kathmandu to a billion dollar empire, and just now, you mentioned how you have had close relationships with politicians such as GP Koirala and Sher Bahadur Deuba. Has this benefitted your business?
Any enterprise has to have close ties to the entire political establishment, personal political preferences aside. All industries have to work closely with the government, but this does not directly imply that there need to be unholy alliances. If your business is transparent, you do not need to have shady dealings.
This will be your second term in Parliament. Are you seeking a larger role this time?
I have not made any preconditions, I hold no biases, and I am not looking for a larger role. The Prime Minister (Sher Bahadur Deuba) has asked me to play a role in bringing about more robust economic development. My priority and my commitment are focused on this. The party has to give me a role where I can be effective in achieving this. If you’re asking me if I have aspirations to become a minister, let me tell you that even a minister might not be effective in exacting change, so I do not have such aspirations—I want to help effectively.
You were criticised when nominated as PR candidate for the Nepali Congress. Ex-editor Kosmos Biswokarma on his twitter feed wrote, “Binod Chaudhary in Madhesi quota? Is this why the PR system was adopted?...Alas!”
Everyone has a right to their own views. I respect that. However, Man Mohan Singh throughout his tenure as Prime Minister was nominated to the Indian Upper House of Parliament. So, I do not see the need to differentiate between the FPTP and PR systems.
Years ago, you said that if Thaksin Sinawatra can be prime minister of Thailand, so could you…
I have already said that I set no pre-conditions to be nominated by Nepali Congress through PR. I have come here to support my agenda and to exact economic development. I think I can bring about a lot of changes, both within the NC and outside through my experience. But what my exact role will be is something that time and the party will make clear. Having said this, if I am entering politics and say that
I have no aspirations to become PM one day, I would be lying. But that does not mean that this is my objective in joining NC today.
In your book, you say that you gave Gyanendra the benefit of doubt.
I do, but I also write that he could never trust me and I could never trust him.
You also say that Gyanendra could mirror his business success in politics as well. In this you have used persons such as Modi, Lee Kwan Yew and Mahathir Mohammed as model leaders. They were successful, but they are also seen as authoritarian leaders.
Let us try to define democracy. To create a chaotic situation and then call yourself the biggest proponent of democracy is not correct. Even in Britain, where there is no written constitution, there is an order of work, a discipline. I believe in a clear structure, a clear hierarchy, and a system of taking ownership of actions. I built CG in that way and I believe the nation too should work in this way. If a person is working towards the betterment of the people, if someone takes strong, clear actions—you may call it authoritarian but I do not view it that way. Look at Modi, he climbed to the pinnacle out of nowhere because the people brought him to that position—purely based on the work he did in Gujarat. He was not in the BJP’s top hierarchy before his sudden rise.
You also write in your autobiography: “The idea was to motivate Modi to turn his attention to Nepal. To motivate him further I also stressed on the deep rooted religious and cultural ties between the two immediate neighbours.” Does this mean that religion will be a strong component of your politics?
The leanings that Modi has towards Hindutva, it’s natural to use that to remind him to focus on Nepal. By the way, I am not a spokesperson of Nepali Congress here, but speaking for myself—I am a staunch believer of our Sanathan Dharma. I’m not biased against any religion, I’ll even pray before a church or a mosque. But I’m definitely against forced religious conversion.
You’re lauded as Nepal’s only dollar billionaire. How does one achieve such success?
First, you have to dream. Then you have to show persistent commitment to that dream. You cannot have a complex that you come from a poor nation with lots of obstacles. You have to jump over such obstacles. If the vision or path isn’t right, there is no way success can be achieved. Show me one industrialist or even a corporate house that has cheated its way to the top, and managed to sustain itself at that level. Unscrupulous ones always shine for a while and then they fall.
What are CG’s priority sectors internationally?
Our main focus abroad is on Wai Wai and related food and beverage businesses. Our dream is make a Nepali brand recognisable all over the world; I think we are making progress in that direction. The second sector is hotels. Real estate is another big one. The thing is, to grow globally; you do not need to enter multiple sectors. Nepal is a small country, so to grow we have entered 16 diverse sectors here.
Our laws do not allow Nepalis to invest abroad. How have you managed to circumvent this provision?
As a matter of fact, I grew the business by living abroad. Two of my sons are NRNs. But I feel very proud of my achievements and the media’s support. The first time I opened a plant in Sikkim, media praised the development and lent me support. If the media had raised objections then, I probably would have had to scale down operations. However, there is no justification whatsoever for NRNs to be allowed to invest abroad and also in Nepal, but Nepalis aren’t allowed to expand their companies from Nepal itself. There is no justification for Nepali companies not being able to invest their post-tax surplus income abroad. That this situation still exists is unfortunate.
What percentage of your wealth do you give back to the society that made you wealthy?
We don’t calculate it in percentage terms. We have a professionally run foundation. We have not allowed money to be a constraint in growing our foundation. Having said this, just dumping money isn’t effective. Otherwise we would have more
change in Nepal, given the billions of dollars UNDP, USAID and other
INGOs have pumped into Nepal. We are working on an effective system that will exact change. We want the foundation to grow tenfold, and when that time comes, we are willing to contribute ten times more. It is a conscious decision on our part to slowly grow the foundation.
You have invested in Nabil Bank through foreign company NB International, of which you are a shareholder and you probably earn dividends from this. How will you manage this once you are a Parliamentarian?
NB International is a company, and our international arm has invested in that company. We have never had any regulatory issues in the past two decades and more. I will definitely plead to change laws that I think are wrong. Just yesterday, CNI published a list of 21 laws that have to be repealed. However, you know that the parliamentary system doesn’t work where one person’s pleading will fix laws or repeal them. I will not attempt to exert any undue authority.
CG is a private company so its tax filings are not released. However, since you’re a billionaire, people want to know why you’re not the top taxpayer in the country.
We probably are, in aggregate, the largest taxpayers in the country. Some companies look like they are large taxpayers because they registered as a single entity. But CG is broken into multiple companies, and the tax obligation is divided as such. If The Kathmandu Post decides to investigate the ten largest corporate houses to see how much tax they pay, and all other houses submit their information, I too will release ours.
How do you look at the recent Left alliance? Are you worried that, should they win elections, they would push the country towards communism?
I have worked as an MP for UML. That UML gave a seat to an industrialist and free market leader like me is itself a sign that they have changed and are not communists. It could be an election tactic on the UML’s part to look leftist. There are only three communist countries left on earth, and I don’t think the Maoists and the UML will decide to go that rout