The Shelter Imbroglio: The Rise and Fall of an Indian Family Business

Abstract

Innovative practices in start-ups and family business is widely recognised. This case study attempts to demonstrate how dreams can inspire youngsters and at the same time lust for additional wealth can destroy a family business. The case traverses the rise and fall of Shelter Pvt limited (SPL).It is the hard work, opportunity orientation and recognition that assist in establishing a profitable enterprise. Dreams become the driving force. Nadeem, in his childhood dream imagined to run a successful enterprise, after he was influenced by his favourite Indian movies that the family watched over television. He belonged to a middle class that had a support from the only earning member, his father a service man in a Government organisation. There was no experience within the family to set up a family business.The family was regularly visited by a family friend Saurabh, who was working in a private firm. And that was all the experience Nadeem could nurture during discussions over tea, while they watched television over week ends. Nadeem fascinated and inspired by a movie decided to set up his own business over the next few years once some experience and seed capital was earned. Soon he took up a job with Life Insurance Company (LIC) as an agent and during the course picked up decent incentives and also began social networking.As time passed his earning doubled! The hard work started paying dividends. In an interesting move, Pankaj his boss and an inspiration, from LIC moved to HDFC bank and offered him a job based on commission, which he did and this added additionally to his incentive. It was clear that Nadeem was closed to incubating his dream. In a surprise move Pankaj moved to ICICI Bank limited and subsequently offered Nadeem a franchisee of Home loans.The firm brought in some stake from the family friend Saurabh and set up Shelter Pvt Limited (SPL), Nadeem became the Chairman Managing Director (CMD).It was a smooth discovery of business as opportunities were very large, since private lenders were limited operating in the market. Nadeem was driven by the quick money he generated and started developing lust, a factor that became detrimental to the firms’ existence. Lesser educated staff was recruited and each time the manger of the firm gave in ideas for expansion, Nadeem would refuse. Conflict of interest crept in the budding business too soon. Meanwhile, as the firm progressed due to the rich networking, the family friend desired that his son be brought into the board. Nadeem did this willingly, but realising late that altruism had also crept in the family business. Saurabh’s son recruited many known family members in SPL without the knowledge of Nadeem.The managers go their way without listening to Nadeem and centres of politics have been created! Nadeem himself, Saurabh and rest of Saurabh’s close mates who have inadvertently been taken on the firms’ payroll have formed pockets. It seems no one goes by the MD’s way of working and it is free for all. The reality today is that the wealth that Nadeem had created based on his dreams and inspiration is receding fast due to laundering of funds into private interest as a result the founders have got into the habit of harming themselves.Nadeem’s SPL is in Imbroglio! What to do to save the firm from being extinct?