“In your darkest hour you have two options: One, you get overwhelmed by the massive extent of the problem and it paralyses you from any action; the other, you anticipate the worst case scenario and deal with it the best way you can. I choose the latter.” This choice—to fight back and swim against all odds—has brought Dr Habil Khorakiwala, 73, back from the brink. Twice.
One spend hasn’t been cut, however: R&D. Khorakiwala launched Wockhardt’s drug discovery programmes 15 years ago, and budgets have never been cut even during the company’s toughest financial years, because, he says, “I always believe it’s a long-term gain. Never sacrifice any part of the future to save the present.”
No action, he says, is trouble-free; even inaction has a cost. “Running a business will lead to problems. Don’t run away from it. Have discipline and work at it.”
The tenacity and calm in times of crisis are traits that define him. This is also what his colleagues and friends often single out about him. And these qualities have inspired, and rubbed off on, the next generation.
Daughter Zahabiya Khorakiwala (33), who is managing director of Wockhardt Hospitals, says her father remained as cool as a cucumber throughout the troubled years: “He is a fighter and will never resign [himself] to any situation because he firmly believes that every problem has a solution.”
Mentored by her father, Zahabiya has opened two new hospitals (to add to the seven left after the sale to Fortis), and taken revenues from Rs 180 crore in FY10 to Rs 350 crore in FY15. With the most recent launch, a hospital in South Mumbai, she personally looked into every detail, from the dozens of permissions required to run a 300-bed hospital to recruiting the surgeons, doctors and specialists. She follows the principles that her father espouses; with hospitals, he says, financial success is secondary, “Establishing a benchmark in clinical care is more important.”
For the Khorakiwalas, a business family, social responsibility is deeply ingrained. They owned Akbarallys, which was originally India’s first true department store. Habil’s father, Fakhruddin Khorakiwala, had bought Worli Chemical Works (which was later renamed Wockhardt)as part of a backward integration plan for the pharmacy in Akbarallys. A busy man, Fakhruddin Khorakiwala made time to serve as Sheriff of what was then Bombay. Habil Khorakiwala made CSR activities a regular part of his agenda, and in 2008, he merged all those activities into a formal entity, the Wockhardt Foundation. This was partly prompted by his eldest son, Dr Huzaifa Khorakiwala (44).
An MBA from Yale, Huzaifa had worked with Wockhardt’s international operations in the US and later the UK, before returning to India to work alongside his father in India, handling the veterinary pharmaceuticals business which was sold in 2008. Always spiritual, he had read many religious books and developed a desire for care-giving. “My son walked up to me in 2008 and said, ‘I want to focus on the Foundation work, and don’t mind spending more time on it.’ I said, ‘go ahead and do it.’” Huzaifa became CEO and trustee of Wockhardt Foundation.
The foundation raises its funds not just from Wockhardt, but also from other organisations seeking to conduct professionally-run CSR activities. It employs 300 people and runs a number of activities. Its 60 mobile medical vans—fitted with the latest equipment, stocked with necessary medicines and staffed by experienced doctors—provide healthcare in remote villages and areas in ten Indian states; corporations can sponsor these vans in return for branding, and they get regular reports on the operations and number of people it has helped. It has also built 1,000 clean toilets in villages, started 25 toy libraries to encourage children to read and absorb good values (an initiative spearheaded by Huzaifa’s wife Samina), and has started an e-learning project to cover 200 schools in Thane, Aurangabad and Rajasthan. From a Rs 1.8 crore corpus in 2008, the foundation has raised Rs 70 crore as of FY15. Huzaifa plans to ramp up activities over the next three years; he wants to expand to 300 mobile medical vans and build 3,000 toilets.
The senior Khorakiwala has good reason to look back on the last few years with a wry smile. In 2012, he was the biggest gainer in the Forbes India Rich List, adding $1.17 billion to his net worth and moving up 47 places in the rankings. The problems with the US and UK pharma regulators later that year saw Wockhardt’s share prices plummet, as did his position on the Rich List: He lost $1.09 billion and dropped 56 places.
Today, he has triumphed against adversity, and come back stronger. His children have come into their own and are growing the family business, in their own ways. He has created value for both his shareholders and the community.
And there’s the little matter of his personal wealth. Wockhardt share prices have surged, and the 74.39 percent promoter and promoter group stake has resulted in a considerably heavier bank balance: His personal wealth went up by $580 million, placing him at 59 in the 2015 Forbes India Rich List. As he likes to say, “If you do the right thing, it will lead to good business.”
(This story appears in the 29 October, 2015 issue of Forbes India. To visit our Archives, click here.)