Precisely at 1:46pm on December 28, a fax arrived at the Bombay Stock Exchange.
This rare gesture by Mr. Chandran was largely ignored by the media but when I learnt about it, I was delighted.
I do recall that in 2008, Siddhartha Lal offered to his minority shareholders at Eicher Motors a deal that he was not obliged to offer. As part of a JV transaction with Volvo, he sold a 13% of his family’s stake in Eicher Motors at a price which was more than twice the prevailing stock price. In a buyback transaction subsequent to that deal, he offered the same terms to Eicher’s minority shareholders by initiating a stock buyback program in which Eicher gave them an option to sell 13% of their holdings at the same price at which Siddhartha Lal had sold his family’s shares to Volvo. He didn’t have to do this. There was no legal obligation to do it. But he did. And that gesture went largely ignored by the media.
I am a stockholder at Ambika and a fan of Mr. Chandran. When I learnt about his gesture towards his junior partners, I wrote a thank you note to him.
Here’s what he wrote back:
I intend to live a simple life and the expenditure for that is very limited. The dividend that I receive from my Company is excess for my expenditure. The Shareholders of my company have reposed faith in me while investing in my Company and I should live up to their expectations. While they receive only dividends, I felt it should be the same for me as well.
A few days ago, I sent a note to my students titled “The Hedonic Treadmill” in which I reproduced Ben Franklin’s writings on the virtues of frugality and simplicity — virtues that are clearly present in Mr. Chandran in abundance.
NOTE: THIS IS NOT A RECOMMENDATION TO BUY THE STOCK OF AMBIKA COTTON MILLS. IT IS A RECOMMENDATION TO LEARN FROM THE VALUE SYSTEM OF A HUMAN BEING.