Shashikant Ruia, the patriarch of the Essar Group, passed away in Mumbai, at the age of 81, the business group said in a statement. In many ways Shashi Ruia's journey coincides with India's growth from a new democracy to a global powerhouse.
Ruia, who along with his brother Ravikant Ruia co-founded the Essar Group in 1969 in Chennai, was one of India's most prominent businessmen in the 80s and 90s. At the time of its founding, the group won a Rs 2.5 crore award to build an outer breakwater at the Madras Port Trust.
It was only in the 1980s that the family moved to Mumbai and with them brought the Essar Group to India's financial capital. Under the first generation, Essar Group expanded into construction and engineering, shipping, oil and gas, steel, telecommunications, among other lines of infrastructure businesses.
Essar became India's first independent power producer and started a power plant at Hazira in the early 90s. Other power plants under the group came up in Madhya Pradesh, Gujarat, Odisha, and internationally in Canada.
In 1992, Essar acquired the South India Shipping Corporation to strengthen its shipping venture. By the mid-90s Essar Group partnered with Swiss PPT to launch the Essar cellphone. Later it partnered with Hutchinson to launch telecom services. The partner's India stake was later acquired by Vodafone PLC UK, making Essar Group the official partner for Vodafone's India operations.
By the late 90s Shashi Ruia's son Prashant Ruia had taken over control of three of the group's key businesses, including steel, oil and power. Later, Prashant became the heir apparent for all Ruia businesses.
A keen believer in keeping the family together, Shashi Ruia lived in Mumbai along with his own family and his brother's. This family dynamics continues to date and prompted an Indian business tycoon to once comment that the Ruia family takes critical business decisions over lunch with each other.
“For us the lunch is every day! It’s a very, very close-knit family, we all live together, so obviously we meet for lunch every day, but we probably meet much more often than that,” Prashant Ruia told FT in an interview in 2013.
The Ruia family followed, what Prashant jokingly called the Marwari School of Business. The Ruias trained the second generation of leaders through direct work. In an interview with PTI in June, Prashant recalled that he started participating in the family business in his teens, which gave him the training necessary and runway to take over the group eventually.
The Essar Group that Shashi and Ravi Ruia founded did face many difficulties over the decades. By the late 90s, Essar Group started facing financial stress as it borrowed significant funds to build a steel plant. This however, backfired as the group faced blowback of the Asian financial crisis of 1997.
The group's oil refinery in Jamnagar faced a cyclone hit in the late 90s which led to severe damage and stoppage of work. It was only in 2005 when the group restructured the balance sheet that this business took off again. But in the interim, this affected Essar Group's shipping business as well.
The telecom operations too faced severe stress owing to the 2G scandal of 2011. The Ruias were finally acquitted of all charges of impropriety in 2017.
But in June 2017, Reserve Bank of India named Essar Steel as one of the 12 companies slotted for immediate bankruptcy proceedings. After a lengthy court process, Essar Steel was sold to steel tycoon Lakshmi Mittal's ArcelorMittal.
Shashi Ruia continued to back his family's businesses, during such tough times. In an interview with Times of India in 2007, he noted that a piece of advice he received from his brother really helped him. The group's assets were more than their liabilities, so they would never go under, his brother told Ruia to pacify him during a particularly difficult period. This, Ruia said, gave him a lot of confidence in the Essar businesses.
Essar Group currently operates infrastructure projects under ports, power, shipping, green mobility, metals and mining, among other businesses.
"Shashikanth Ruia's extraordinary legacy will remain a guiding light for all of us, as we honour his vision and continue to uphold the values he cherished and championed," Essar Group said in a statement.
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