Swraj Paul was socialist India's first capitalist revolutionary

His father Payare Lal ran a small foundry that produced steel buckets and farm machinery as part of the Apeejay Group, managed by Paul's older brothers Satya and Jit. After obtaining his Master's degree in mechanical engineering from MIT, Swraj returned to join the family business, but his life changed irrevocably in 1966 when his four-year-old daughter Ambika was diagnosed with leukemia.

Then prime minister Indira Gandhi personally removed bureaucratic hurdles to allow him the foreign currency he needed for treatment abroad – a rarity in socialist India. Despite Paul's efforts, Ambika passed away. Shattered, he relocated permanently to London, taking over the operations of Apeejay Overseas. Following a family partition, he renamed his business Caparo, establishing himself as an independent force while maintaining his Indian connections.

Tragedy would revisit him years later. In November 2015 his son Angad Paul, CEO of Caparo, died after falling from his Marylebone penthouse, dealing Paul another devastating blow in his golden years.

The takeover playbook

Despite this, Paul, a diminutive man with commanding presence, was always cheerful in public and completely unashamed of his Indian accent. A generous Punjabi at heart, he was a genial host to visitors from his home country. But beneath that warm and welcoming exterior lay steely business determination.

His 1983 corporate raids read like a template for every activist investor playbook since. Like the notorious American corporate raider Carl Icahn, he spotted a host of bloated, family-controlled Indian companies trading at massive discounts, with promoters holding laughably small stakes. The Nandas controlled Escorts with 5%; the Shri Rams ran DCM with 10%. It was corporate control by dynasty, not by ownership.

Paul's assault was surgical. Using his Indian agents, he quietly accumulated 13% of DCM and 7.5% of Escorts, making him the largest shareholder in both virtually overnight. For the first time in independent India, family capitalism was exposed to genuine market forces. The establishment was horrified.

The unravelling

What followed was an illustration of how a supposedly socialist India protected its oligarchs. The affected companies refused to register Paul's shares. The Reserve Bank of India discovered sudden regulatory objections. The government hastily imposed a 5% ceiling on foreign holdings after liberalising NRI investment just months earlier.

Even the Life Insurance Corporation (LIC), a major shareholder in both companies, convened an extraordinary meeting to block the transfer of the shares to Paul, only to be slapped down by Bombay High Court for exceeding its brief.

The court's rebuke was prescient: "The LIC Act does not authorise taking over other companies only because LIC holds over 50% of shares in the borrowing company." It drove institutional passivity in corporate governance for decades.

Paul won in the Supreme Court three years later, but the damage was already done. Delays, uncertainty, and bureaucratic hostility exhausted his resources and patience. In 1986 he accepted a face-saving exit mediated by finance minister Pranab Mukherjee, selling stakes back to the families he'd sought to discipline.

Paul's later years were not without controversy either. In 2009 he was embroiled in the UK parliamentary expenses scandal. Though he maintained his innocence, he requested an investigation and voluntarily repaid £41,982. Family disputes over Caparo Financial Solutions management saw his children battling in the National Company Law Tribunal over alleged mismanagement, further tarnishing the Caparo brand.

A revolution delayed

In India, Swraj Paul will be remembered for his audacious takeover battles. The final act wasn't just Paul's defeat; it was India's as well. His intervention could have triggered a corporate governance revolution, one that eventually arrived in the 2000s when institutional investors finally forced Indian companies to treat minority shareholders as partners, not extras. Instead, License Raj ensured that inefficient family control continued while genuine entrepreneurs such as Paul were branded predatory “foreign hands".

In today's India, where acquisitions (even hostile ones such as L&T's takeover of Mindtree) are normal, Paul would have been a hero. But in the India of 1983, he was a decade too early. He remains the Carl Icahn that socialist India was too frightened to embrace, and too foolish to learn from.

Swraj Paul’s journey from grieving father to celebrated British industrialist, despite later controversies, exemplifies his personal resilience and determination to pursue opportunities that socialist India denied both to him and itself.