“What’s in a name? That which we call a rose by any other name would smell just as sweet.”
Posted on 9th December, 2024 (GMT 09:01 hrs)
Updated on 29th December, 2024 (GMT 13:55 hrs)
ABSTRACT
The blog post critiques Ajay Piramal’s business strategies, labeling him a “Chameleon King” for repeatedly using mergers, demergers, and rebranding to evade accountability. It highlights his corporate history, including acquisitions in the pharma sector and controversial actions in housing finance, such as the acquisition of DHFL during its insolvency proceedings. The post accuses Piramal of exploiting legal loopholes, obscuring past misconduct, and profiting while avoiding regulatory scrutiny. Key examples include the environmental violations in Digwal, Telangana, which was followed by the demerger of Piramal Pharma, and alleged irregularities in discounted DHFL loans benefiting entities linked to Piramal. The post criticizes his reliance on legal stays to delay unfavorable rulings, branding this pattern as a tactic to sidestep responsibility. Ultimately, it calls out Piramal’s strategies as manipulative corporate maneuvers that undermine public trust and regulatory oversight, while benefiting from political connections and systemic gaps in accountability.
DISCLAIMER: The allegations and claims outlined in this article are subject to ongoing judicial review and investigation, with many issues remaining sub judice. Readers should refrain from forming definitive conclusions due to the absence of conclusive evidence. OBMA has always mindfully used cautious and legally accurate language, employing terms such as “alleged,” “reported,” “possible,” and “supposed” when discussing matters related to Mr. Ajay Piramal and other business figures. We encourage readers to maintain an open-minded, critical, and independent perspective to foster a just and equitable society, challenging structurally induced constraints.
We are back again with a brief yet comprehensive discussion on Mr. Ajay Piramal’s peculiar business strategies to establish himself again and again as a seemingly “invincible” (paper tiger?) crony corporate tycoon in India.
Some of the DHFL victims have reportedly observed that the psyche or persona of Mr. Piramal as reflected through the history of companies within his conglomerate presumably/supposedly reveal a striking schizophrenic fragmentation, as we discussed the same in the following:
This alleged “dilemma” of Mr. Piramal is not only observed in the case of the DHFL scam, but also in the case of his other businesses through several consecutive mergers and demergers as well as namings and renamings.
For example,
1. His pharma-business has shown such a chain of events:
- Early 1980s: Mr. Piramal took over the reins of the Piramal Group, acquiring Gujarat Glass Limited in 1984 (later renamed as Piramal Glass).
- 1988: Acquired Nicholas Laboratories, entering the pharma sector.
- 1992: Renamed as Nicholas Piramal India Ltd. (NPIL)
- 1993: Collaborated with Allergan; acquired Roche India’s domestic business.
- 1999: Piramal Glass acquired Ceylon Glass Company Limited, Sri Lanka.
- 2000-2016: Multiple acquisitions, including ICI Pharma, Coldstream Labs, and Ash Stevens. In 2006, the company bought Pfizer’s UK manufacturing facility in Morpeth. The company also formed the Piramal Foundation, a CSR/philanthropic arm of the group. In 2008, NPIL became merged with Piramal Healthcare Limited (PHL). In 2011–12, Piramal bought 11% in Vodafone Essar. PHL went on to become a part of PEL in 2012. Piramal’s Decision Resources Group acquired Abacus International, a UK based company. In 2013, Piramal Enterprises acquired the brand Caladryl in India. In 2014, it sold its 11% Stake in Vodafone India to Prime Metals, an indirect subsidiary of Vodafone Group.
- 2020: After becoming a Piramal Enterprises subsidiary, it received Carlyle investment. In December 2020, Piramal Glass was sold to The Blackstone Group for US$1 billion.
- 2022: Demerged and listed as Piramal Pharma Limited (PPL), just a few years after it was accused by the National Green Tribunal for flouting environmental norms in Digwal, Telangana.
- 2023: Expanded manufacturing facilities in Canada, the U.S., and Scotland.
2. His Housing-Finance Business, especially in the context of its unfolding during the DHFL scam (2019—), has shown such similar merger-demergers:
Piramal Enterprises, the flagship of the Piramal Group, focuses on financial services, specializing in retail lending, housing, and vehicle finance. Its key subsidiaries include Piramal Capital & Housing Finance (PCHFL) and PHL Fininvest. In 2021, it integrated Dewan Housing Finance Corporation Limited (DHFL) into PCHFL, following its alleged “acquisition” (or adverse possession?!). The company collaborates with fintech and vehicle finance firms. Its strategic ventures include the India Resurgence Fund (with Bain Capital since 2016) and Piramal Capital Fund (with CDPQ since 2020), managed by the fund management business: Piramal Alternatives (founded in 2021).
In May 2024, Piramal Enterprises announced plans to merge with its unlisted housing finance arm, Piramal Capital & Housing Finance (PCHFL), to streamline its structure. Shareholders will receive equity in the merged entity, renamed Piramal Finance, and redeemable preference shares. This aligns with RBI’s 2025 listing mandate for upper-layer NBFCs and licensing requirements. The merger, expected in 9–12 months, aims to enhance operational flexibility and stakeholder value.
Piramal Enterprises to merge with unlisted housing finance arm for listing VIEW HERE ⤡ (As reported on 9th May, 2024 ©Business Standard)
After Aditya Birla, Piramal to merge with private arm VIEW HERE ⤡ (As reported on 9th May, 2024 ©Mint)
On 4th April, 2024, it was seen that:
Sebi pulls up Piramal Enterprises with regard to sale of its 8.34 per cent stake in Shriram Finance VIEW HERE ⤡ (As reported on 5th April, 2024 ©The Telegraph)
(Shriram Finance now provides one of the highest fixed deposit interest rates, offering up to 9.40% annually. This includes additional benefits of 0.50% p.a. for senior citizens and 0.10% p.a. for women depositors, ensuring attractive returns on investments⤡. We anticipate another “DHFL scenario” in Shriram Finance’s upcoming future. Hence, Beware of Shriram Finance!)
Moreover, in November 2024, SEBI is also proposedly investigating Whistleblower claims against Piramal Capital & Housing Finance Ltd (PCHFL) regarding discounted loans transferred from DHFL to entities linked to Piramal Group promoters. Allegedly, these transactions caused financial harm to public shareholders of Piramal Enterprises Limited (PEL). Loans were reportedly assigned at deep discounts to entities like Encore Natural Polymers, yielding profits for the recipients. The Whistleblower also questions fund origins tied to defaulter Sudhakar Shetty. This follows a broader CBI inquiry into DHFL’s financial mismanagement involving Rs 14,000 crore. No official responses have been issued till now.
Whistleblower Seeks Sebi Probe Into Piramal Entity Selling DHFL Loan At Steep Discount VIEW HERE ⤡ (As reported on 14th November, 2024 ©Business World)
SEBI launches enquiry into alleged irregularities in Piramal’s acquisition of DHFL loans, says report VIEW HERE ⤡ (As reported on 15th November, 2024 ©DNA India)
For more information, view the following:
Now, as we observed:
i) Mr. Piramal has a recurring pattern of seeking “blanket” stay orders when situations threaten his business interests. A notable instance is his approach to the National Green Tribunal, requesting a blanket stay on environmental compensation imposed by the Pollution Control Board, which was followed by the NGT slamming the company for seeking the same. This was related to allegations of environmental exploitation by his companies in the Digwal case, highlighting his resistance to accountability in adverse circumstances.
This pattern was evident during the DHFL scam when Mr. Piramal, alongside the RBI-appointed CoC, twice stayed adverse judgments. First, he stayed the NCLT order (19/05/2021), challenging his resolution plan, at the NCLAT. Later, when the NCLAT (27/01/2022) declared the resolution plan and process illegal and irregular on the basis of 63 Moons’ arguments, he secured a stay at the Supreme Court (11/04/2021). These actions reflect a recurring strategy to delay or circumvent “unfavorable” rulings.
ii) Mr. Piramal frequently resorts to rapid mergers, demergers, acquisitions, and renaming of his companies, often in response to allegations of misconduct, though not always “with success”. This tactic was evident when he was labeled a “polluter” in the Digwal case in 2018, which was followed by the demerged emergence of the PPL in 2022. Similarly, in the housing finance sector, following unfavorable NCLT (19/05/2021) and NCLAT (27/01/2022) orders regarding the DHFL CIRP, he merged it with PEL. Additionally, he created confusion by simultaneously using dual names, PCHFL and Piramal Finance, obscuring clarity for investors, consumers, and stakeholders about ownership and transactions. The “merger and/or amalgamation phenomenon” in particular serves, in the case of Mr. Piramal as with other similar business tycoons, monopoly capitalist incentives that align with his crony capitalist bindings.
This very confusion made us think that the Honourable Advocates Mr. Kapil Sibal and Mr. A. M. Singhvi are fighting for Piramal, while in fact, they are representing the “erstwhile” DHFL. Readers of the blog, please pardon us for this! ⤡ ⤡ ⤡ Piramal Capital And Housing Finance vs 63 Moons Technologies Limited) on 19 October, 2022 VIEW HERE ⤡
Such repeated name changes and structural shifts appear to be strategies to evade accountability, distancing current operations from past controversies. By dissolving the ‘identity’ of entities involved in alleged misdeeds, he seemingly sidesteps blame and responsibility. This aligns with his motto, “Buy Imperfect, Sell Perfect,” allowing him to rebrand and profit while eluding scrutiny from vigilant agencies. His rise as a corporate figure, bolstered by connections with the BJP, underscores his shrewd adeptness at leveraging such tactics to maintain his corporatist influence and position. Let us call this as the “Chameleon Strategy” adopted by Mr. Piramal, i.e., changing colours quickly to presumably disown its previous identity and take up a “brand new” identity that apparently has “nothing to do” with the erstwhile existence! What a clever means!
The Companies Act, 2013, governs mergers and demergers in India, detailed in Sections 230–240. It outlines procedures, including NCLT and stakeholder approvals. Fast-track mergers under Section 233 apply to small or wholly owned companies, while cross-border mergers under Section 240 require RBI approval. Demergers split companies into independent units, aiding diversification and specialization, often through spin-offs. The Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016, guide procedural aspects. Violations can lead to penalties. Demergers are strategic for corporate restructuring and growth. For, more, view: MERGER AND AMALGAMATION OF COMPANIES IN INDIA: AN ANALYSIS OF ITS IMPACT ON VARIOUS STAKEHOLDERS VIEW HERE ⤡
In the grand theatre of Indian corporate chicanery, Mr. Piramal might well be crowned the Maharaja of Morphosis—a master illusionist whose business acrobatics can make the most dubious of pasts disappear in the blink of a rebranding. From Nicholas Piramal to Piramal Pharma, from DHFL to Piramal Finance, his conglomerate’s trajectory resembles a shell game played at corporate boardrooms, where the audience—public stakeholders and regulators—struggles to keep track of what lies beneath.
But beneath the glossy renaming and corporate gymnastics lies a more unsettling pattern: a calculated evasion of accountability, a strategy so transparent it might as well be cloaked in neon. Whether it’s environmental degradation swept under the rug of demergers or whistleblower allegations buried under legal stays, Mr. Piramal has turned the Companies Act into his personal playbook for “escape artistry.”
Perhaps it’s time we recognize that no matter how many times the cat changes its stripes, it’s still clawing at public trust. And while Mr. Piramal’s game of mergers, demergers, and maneuvers may dazzle some, it’s high time regulators and citizens alike ask: When does disruption become destruction? Until then, the “Chameleon King” reigns on—shedding corporate skins faster than we can say “Corporate Social Responsibility” (?)!
UPDATE (15/12/2024):
India’s Asset Reconstruction Companies (ARCs) face numerous challenges, despite their intended role in managing non-performing assets (NPAs). Critics highlight inefficiencies, governance lapses, and regulatory issues. Concerns over opaque deals, valuation irregularities, and favoritism raise doubts about transparency.
The RBI’s deputy governor recently exposed dubious practices, such as asset sales to affiliated entities, questionable valuation of security receipts, and inaccurate reporting to the CRILC system. In response, stricter regulations effective January 2025 aim to address credibility issues within the ARC business model. However, retail investors and homeowners continue to bear the brunt of malpractice during insolvency proceedings.
Cases like DHFL highlight the problem. Its loans were allegedly sold to Piramal Capital and Housing Finance Ltd. (PCHFL, which is now PEL: who is to be blamed, then?) at steep discounts and later resold at inflated prices, harming small investors. Similarly, fraudulent loans assigned to ARCs have legitimized bad debts, often at the expense of homebuyers.
The entry of larger players, such as the National Asset Reconstruction Company (NARCL), intensifies competition, straining smaller ARCs and casting doubt on the sector’s future. Meanwhile, Indian banks have written off Rs. 14.56 lakh crore in bad loans over the past decade—a massive burden ultimately borne by ordinary citizens.
UPDATE (29/12/2024):
As per an earlier report in June 2023, The Piramal Enterprises (PEL) demerger separated its pharmaceutical arm into Piramal Pharma Ltd (PPL), aiming to unlock value for both businesses. Despite initial expectations, the combined market value of the two entities fell by 37% post-demerger. PEL now focuses on financial services, while PPL operates independently in pharmaceuticals. Investors received four shares of PPL for every share of PEL. The demerger mirrors successful precedents like Bajaj Auto and Sundaram Clayton but has yet to deliver similar returns. The math behind the Piramal Enterprises (PEL) demerger faltered primarily due to market mispricing and investor expectations. While the demerger aimed to unlock value by creating two focused entities—Piramal Pharma Ltd (PPL) and the financial services arm—post-demerger valuations did not reflect the anticipated growth or asset quality. The financial services business faced concerns over asset book risks, while PPL struggled with growth visibility and debt management. This divergence caused the combined valuation to drop significantly, disappointing shareholders.
Piramal Enterprises demerger: Wrong math or a mispriced opportunity? VIEW HERE ⤡ (As reported on 15th June, 2023 ©PrimeInvestor)
Once in a Blue Moon Academia 
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