‘Financial crisis’ troubles Bombay First, CEO quits

Has Bombay First, Corporate India’s 15-year-old initiative to put gilt, sheen and chutzpah into resculpting Mumbai as a premium financial stopover between financial capital peers London and Tokyo, hit a financial roadblock?

The six-member executive office team which was handling its day-to-day affairs is down to a mere two – a typist-cum-assistant and a peon – due to financial restraints, which included non-payment of salaries on time since April this year.

The think-tank’s CEO, Vijay Mahajan, resigned in the third week of May. Mahajan told DNA that his action followed “financial constraints”. He refused to comment further.

“Yes, the CEO has quit. We now want new blood,” chairman NK Nayar told DNA on Tuesday, adding that all was well with his organisation.

Mahajan joined Bombay First in 2004 from Reliance Infocomm, where he was a senior vice-president. Nayar heads a steel equipment company and has been the chairman for the past six years.

People associated with BF however termed the financial constraints as financial imprudence. They said BF’s governing body (which has 30 members including the Bombay Chamber of Commerce & Industry as its managing trustee) in September last year backed a decision by Nayar to pay a deposit of Rs1 crore to the YB Chavan Foundation in South Mumbai near Mantralaya, apart from agreeing to a monthly rent of Rs55,000 for a 1,000 sq ft office on its third floor.

Ironically, the think-tank had already been operating from the same building’s fourth floor since 1991, whose rent was Rs15,000 and the deposit a modest Rs12.5 lakh for a 300 sq-ft office.
 
“Financial prudence suggests that BF could have relocated to any office made available by BCCI members or have operated from the BCCI office at Ballard Estate,” said one of the project’s initial handlers, who didn’t wish to be identified.

“Bombay First’s corpus itself is around Rs2 crore and a half of it is now earning money for the YB Chavan Foundation! The BCCI has been trying in vain to get both the body and the CEO to get pro-active on the revenue front. In fact, the chamber has held up its funds from April itself,” the former project handler said. The BCCI’s annual subsidy for BF is around Rs13 to Rs15 lakh, with other interested members pitching in with a lakh or Rs50,000 when requested.

When contacted, BCCI executive director Manju Sood declined to comment.

According to Nayar, the payment of the Rs1 crore as a deposit had not dented its operations in any manner. He also denied that the Bombay Chamber has stopped its funding and claimed it was still paying all its expenses for the office.

“We needed more office space to do more work which is why we shifted from the 300 sq feet office to this spacious 1000 sq feet one. Several of our initiatives have been accepted by the state government. Earlier this month I was in London, for a meeting with London First on security and terror issues. In January we raised money for families of the Oberoi staff, who were victims of the 26/11 terror attacks. Our latest initiative is in the shape of a concept plan for the Mumbai Metropolitan Region. We have an international conference in November,” he said.

Regarding the issue that he was flouting BF’s constitutional obligation to remit office after a year by staying on for six years, Nayar said the one-year tenure was in vogue earlier and was no longer relevant.

Sources said, Mahajan was upset over Nayar’s insistence that the CEO should raise money through sponsorships to boost revenue — specially after shifting to the larger and costlier office. Mahajan however pointed out that given the tough economic conditions being faced by corporates, this was meaningless exercise. He resigned following Nayar’s adamant stand.

The former project handler said, “Meetings would be held in Belvedere, other five-stars or at the Yacht Club. You forget that you are on a charity dole. In this financial crisis, corporate members are shying away from picking up the tab for meetings or even responding to reminders about non-issue of routine payments to Bombay First.”

“Bombay First has become an adjunct of the state government: exactly what the founders didn’t want it to be. Well-known development experts from across the globe had pooled in their thoughts for the new, bold vision, thanks to the British Council which had made the maximum contribution. All has gone to nought,” he added.