CDS (I) 2021 General Knowledge · Question 30 of 120

Correct — A, McLeod. The takeover is documented in the business history of the period: around 1952-53, companies fronting for the Surajmull Nagarmull group bought up the jute companies under the control of McLeod and Company, which at the time managed and owned ten jute mills, sixteen tea companies and light railways. McLeod had been founded by Charles McLeod in the 1880s as a Calcutta jute trading firm and had grown into one of the great managing agencies; it passed to C. L. Bajoria of the Surajmull Nagarmull house. The group itself was a partnership of two Marwari families of Calcutta related by marriage, those of Surajmull Jalan and Nagarmull Bajoria, traders in the 1930s who moved into jute manufacturing in the 1940s. The takeover is the single transaction that turned them into a conglomerate, and the group is one of the two Calcutta houses that rose almost entirely on the purchase of British firms.

• (b)Octavius Steel — Went to a different Marwari house. Octavius Steel, an engineering firm that had supplied city electric lighting systems, passed to the Goenkas — D. P. Goenka became its owner in 1958, after some of its electrical units had been nationalised. The Goenkas took Duncan Brothers by about 1960 as well.
• (c)Davenport — The subtlest of the three, because it is not wholly unconnected. Davenport was a smaller managing agency with tea interests, and in the following decade companies within the McLeod group did buy into it. That was a consequence of the takeover in this question rather than the takeover itself — the British firm the group acquired, and on which its rise rested, was McLeod.
• (d)Andrew Yule — Never passed to a Marwari house at all. One of the largest Calcutta managing agencies, with jute, coal and tea companies from about 1870, it went public in 1948 and was eventually nationalised in 1974, becoming a government enterprise rather than a private acquisition.

Between 1950 and 1970 the ownership of some of the largest business conglomerates in India passed from British to Indian hands, and the change was concentrated in Calcutta, the country's premier business city in 1950. The vehicle being transferred was the managing agency — a firm that promoted, financed and ran a cluster of separately incorporated companies while owning only a small share of each. That structure made control cheap to buy, since a modest holding in the agency carried the whole group with it, and it also made the groups fragile once the promoters lost interest.

Business history questions of this kind are answered by holding the transfers as pairs, and the main ones are learnable: McLeod to Surajmull Nagarmull, Kettlewell Bullen to the Bangurs, Jardine Henderson to the Mehtas, Duncan Brothers and Octavius Steel to the Goenkas, with Andrew Yule and Bird and Heilgers going to the state rather than to a private buyer. Two honest qualifications belong on this card. The transfers were not uniformly happy events — the firms that changed hands generally saw bankruptcy, nationalisation or a fall in corporate ranking afterwards, and Calcutta de-industrialised as it Indianised. And the paper's hyphenated spelling, Soorajmull-Nagarmull, is one of several transliterations of the same house; the scholarship writes Surajmull Nagarmull.

• Around 1952-53, companies fronting for the Surajmull Nagarmull group bought up jute companies under the control of McLeod and Company.
• McLeod then managed and owned ten jute mills, sixteen tea companies and light railways.
• McLeod was founded by Charles McLeod in the 1880s as a Calcutta jute trading firm; control passed to C. L. Bajoria.
• The group was formed by two Calcutta Marwari families related by marriage, those of Surajmull Jalan and Nagarmull Bajoria.
• Octavius Steel passed to D. P. Goenka in 1958 and Duncan Brothers to K. P. Goenka around 1960.
• Andrew Yule was nationalised in 1974 rather than sold to a private group.
• By 1965 over a third of India's industrial conglomerates were Marwari-owned and based in Calcutta.

• Assuming every British firm that left India was bought by a private Indian group; several were nationalised instead.
• Reading the presence of a firm inside a group's later dealings as proof that the group took it over first.
• Being thrown by transliteration; Soorajmull-Nagarmull and Surajmull Nagarmull are the same house.

As a firm-to-buyer item, or as a match-the-following pairing British managing agencies with the Indian groups that acquired them.

No directly related past PYQ was found.

• practice — not a real PYQ

  The business institution through which a single firm promoted, financed and controlled a cluster of separately incorporated companies in colonial India was known as the

  • (a)managing agency
  • (b)joint stock bank
  • (c)cooperative society
  • (d)chamber of commerce

  Answer(a) managing agency — a small holding in the agency carried control of the whole group, which is what made these houses cheap to take over after 1947.

• practice — not a real PYQ

  Andrew Yule and Company, one of the largest managing agencies of Calcutta, eventually passed into

  • (a)the ownership of the Bangur group
  • (b)the ownership of the Goenka group
  • (c)government ownership through nationalisation
  • (d)the ownership of the Surajmull Nagarmull group

  Answer(c) government ownership through nationalisation — it was nationalised in 1974, unlike the agencies that were bought by private Indian houses.