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A RICH LEGACY

By Colin Young

Deepak Parekg, Chairman of HDFC, is the first overseas winner of the ICAEW Outstanding Achievement Award.

Two important things happened to change Deepak Parekh’s life when he came to London as a young graduate from his native India in the ‘swinging sixties’. A vegetarian, he soon realised that he would have to change his normal diet or starve. The second thing? He qualified as a chartered accountant and embarked upon an international business career which has spanned six decades.

Parekh is currently non-executive chairman of the HDFC group, India’s largest private sector conglomeration based on its total market capitalisation of $30.79n (£19.7bn). The group has over 30m customers, more than 700,000 shareholders, 48,788 employees, 3,898 ATMs and 2,758 branches. The statistics are all the more remarkable considering that HDFC was the country’s first housing finance company, a concept alien to India back in 1977 when Parekh’s uncle, Shri H T Parekh, invited his nephew to join him in the brave new world of mortgage banking. Although it’s a bit of a cliché to say the rest is history, in this case, it’s actually valid. Over the last 32 years, HDFC has helped more than 3m families to buy their own home.

Along the way, Parekh has made a significant national contribution to the wider business world in India, sitting on various government committees and task forces, as well as serving on the boards of major companies, such as Castrol BP India, Hindustan Unilever and Siemens.

He has received many accolades, including the Indian government’s ‘Padma Bhushan’, one of the country’s highest civilian honours, in 2006. That same year Parekh was named best non-executive director by the Asian Centre for Corporate Governance. He also became the youngest recipient of The Economic Times’ prestigious corporate award for lifetime achievement in 2004 and received Finance Asia’s Lifetime Achievement Award in 2008.

Parekh won the title of Businessman of the Year 1996 (Business India) and received the JRD Tata corporate leadership award from the All-India Management Association in 1997.

Born in Mumbai in 1944, Parekh was just three when his mother took him and his elder sister to Rangoon in Burma, where his father was manager of the Central Bank of India. It was 1947, a significant year in India’s history, marking its independence.

GOING PROFESSIONAL

Eight years later his mother took her children back to Mumbai, where they continued their education. He graduated from the city’s university with a bachelor of commerce degree, but then decided that he needed a professional qualification to make his mark in the world. Parekh set his heart on studying in the UK for the ICAEW’s ACA, but this was easier said than done.

‘In those days very few Indians were able to come to London because of the strict foreign exchange restrictions. However, I was fortunate enough to be accepted to take articles with Whinney, Smith and Whinney in London,’ he says.

Arriving in London in the autumn of 1965 was a huge culture shock, says Parekh, who admits almost succumbing to homesickness more than once in the early days. But he managed to resist the temptation to pack his bags and head back to India. However, the poorly paid young articled clerk soon discovered that dietary changes were necessary. ‘I was a vegetarian when I arrived in England, but realised I could only survive by eating the same food as everyone else – Wimpy hamburgers and fish and chips.’

ON THE JOB TRAINING

Despite having been short of cash, Parekh regards these formative years in the profession as pivotal in helping to shape his long and distinguished business career.

‘There were no training centres as there are today. We had to work all day and then try to study at night and at weekends by correspondence course,’ he says. ‘Then just before the exams we would attend “cram classes”. It was tough and challenging.’

But for all its faults, the old system of learning ‘on the job’ had its advantages and provided knowledge which has remained with Parekh till this day. ‘It taught you self-confidence and was not just about debits, credits and balance sheets,’ he says. ‘It gave you a great insight into how business is conducted, how books are kept and audit is done, why a balance sheet is so important.’

Having passed his ACA exams at the first attempt, the newly-qualified Parekh wished to broaden his international horizons before returning to his homeland. So he approached partner Jack Whinney, who arranged a posting to the firm’s consulting arm, Ernst and Ernst, in New York. He added to his experience in the US before spending about seven weeks travelling across America from east coast to west coast, then via Hawaii, Tokyo and Bangkok en route to his home in India.

‘I got home without even the money for my taxi fare,’ he recalls. ‘I had long hair and the first thing my mother did was to send me to the barber to get it cut.’

We’ll never know whether that haircut helped Parekh land his next job in the merchant banking division of Grindlays Bank in Mumbai in 1972, before joining Chase Manhattan Bank, which took him to Hong Kong and Singapore en route to India.

Not surprisingly for someone whose career has taken him to the Far East and South East Asia as well as the UK and the US, Parekh is a passionate advocate of international experience. His advice to young and newly qualified chartered accountants is to take full advantage of the passport the ACA offers to work in different areas of the world as part of their business education.

He rates his days as a young auditor as invaluable in finding out how different businesses work. ‘Some people find auditing boring, but I disagree. I actually picked up much more about business during my training in England than I learned from my college in India,’ says Parekh. ‘I was hardly ever in my own office in London – I was always at my clients’ premises, which could be a bank one day and a brewery the next. There is no better way of finding out how companies are run.

‘There are more chartered accountants running successful companies than people who have MBAs. I’ve known people with an MBA from Harvard who couldn’t read a balance sheet.’

As for his ‘retirement’, it seems Parekh has no immediate plans to ease off the throttle and still puts in a 13-hour working day.

THE ELDER STATESMAN

As India’s ‘elder statesman’ of business and finance, he was part of the delegation which attended last November’s state dinner at the White House hosted by US president Barack Obama in honour of Indian prime minister Manmohan Singh. Parekh also visited the White House as part of the Indian prime minister’s delegation during George W Bush’s tenure in 2008 and had previously met with Bill Clinton.

But rubbing shoulders with world leaders was not part of any ‘grand plan’. ‘I never dreamed I would move in these circles and I didn’t actively look for it. I believe that if you aspire to something, you usually don’t achieve it. But if you work hard and do what you can to the best of your abilities, the accolades will follow.’ His philosophy of business leadership is simple:

‘Work with integrity, have value systems, be humble, accessible and approachable.’ It’s an ethos that has served Deepak Parekh well on the long road through his career.
This article was originally published in Accountancy Magazine, March 2010.