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Memons-

the sailor businessmen of India

History books have often described Memons as " the sailor businessmen of India" who had fanned out of native Gujrat in the 18th century, making abodes and setting business in Indian cities adn far-off places in the Asian and African continents. By the end of 19th century, a sizeable Memon community was reported to have entrenched itself in Burma, Sri Lanka, Far East and countries in East and South Africa.

The origin of Memons can be traced to 14-15 century when a follower of Syed Abdul Qadir Jilani namely Syed Yusufuddin alias Yusuf Sindhi visited India and converted several thousand Hindu families in Kathiawar, Kutch and Thatta in Southern Sindh to Islam. The new converts of Thatta, mostly Hindu Lohanas were forced to migrate because of the persecution by the native Hidus. One group of the migrants went to Harar in Saurashtar and came to be known as Hali Memons while another group settled at Kutch in Gujrat and was designated as Kutchi Memons. It is said that Yusuf Sindhi called the new converts " the Momis" (The examplary Muslims) which over the years became Memons.

A mass settlement of Memons and other Muslim business communities of Gujrat throughout India started towards the end of 18th century and it was perhaps during this period that ancestors of Haroons, Dadas and Hashwanis migrated from Gujrat to settle in Karachi, entrenching themselves in the local business.

In 1960, the Memons had a population of 150,000 living in Pakistan and an equal number in India where they had set up All India Memon Foundation in 1984. They have associations in Pakistan, Mauritius and Tanzania and according to the United Memon Jamaat of Pakistan, their current population in Pakistan and abroad stands at 4 million.

Being a minority and saddled with apprehensions of persecution, the Muslim business communities of Gujrat felt protected under British rule and had strong business ties with them, as is evident from number of title holders among the Memons like Sir Abdullah Haroon, Sir Dawood Adamjee and Sir Sultan Chinoy. Adamjees, Haroons, Jaffers, Abu Bakr, Tabanis, Karims and Dadas had developed business arrangements with several leading English monopolies much before partition of India. Karims had set up their offices in Hong Kong, Japan and countries of the Near East while Abdul Sattar Ahmad, a member of Karim group had shifted to Japan as early as 1940 to look after the family business in South East Asia. He was chairman of the Muslim community and vice chairman of Muslim Mosque Committee in Tokyo before migrating to Pakistan to set up Ahmad Abdul Ghani Cotton Mills Karachi in 1951.

Haji Habib Ahmad of Bantva, later known as Seth Habib Araqwala is reported to have set up 50 branches of his grain import-export business all over India, by the time Pakistan came into being. Adamjee were operating world's biggest jute mill employing 30,000 poeple and Dawood owned Karnaphuli Paper Mills, the biggest pulp and paper project in South Asia.

Kasim Dada today has only two companies listed on the stock exchange, his name does not appear in the 22 families or anywhere in the income tax or wealth tax directory, yet undoubtedly he is the single biggest investor on Karachi Stock Exchange. He was perhaps Pakistan's first industrialilst to own a private Cesena plan in the 1960's in which he used to fly down to his cement factory in Hyderabad. His ancestors had set up the well known firm of Dada Abdullah and Company which sent M K Ghandi popularly known Mahatama Gandhi to South Africa, as their legal representative in the 1890.

While taking about the wealth and economic powers of the Dada family Sergey Levin observed in his article, the Memons of Pakistan published in 1975, that " one of the oldest commercial houses of Memons is the Dada Commercial House. Long before the formation of Pakistan, the ancestors of present day proprietors established a group of trade and industrial enterprises in India, Burma, South Africa and countries of Near East. In Pakistan Dadas were among the major importers and exporters, at the same time to a considerable extent retaining their interests in other countries including India. The Dadas also founded a great number of industrial enterprise in Pakistan including Asbestos Cement plant in Karachi, Hyderabad and Chittgong, three textile companies, Oil Mills, Cotton and chemical plants. But Dada's share in Pakistan's big business must not be judged only on on the basis of the enterprises which they control directly. The point is that the Dada's who have continuously held ruling positions in Karachi Stock Exchange have made wise use of concealed form financial control. They are junior partners in number of Pakistani and foreign monopolies and all this provides a basis for including the Dada's among the 22 monopoly families in Pakistan.

M A Rangoonwala, now settled in Malaysia and engaged in the export of plam oil to Pakistan was the Memon of the Memon communityu. Born in 1924 in Burma, he had lived like a migratory bird, leaving deep footprints at every stop. He came to Bombay in 1934 from Rangoon to set up his family business, migrated to Pakistan in 1947 and by 1970 his Rangoonwala-Bengali group comprised 30 companies relating to textile, food, chemical, woodworking and timber trade. He was president of National Bank of Pakistan for seven years and represented on the board of 40 companies not belonging to his group.

Haroon's great grandfather had migrated to Karachi in 1858 and entered sugar and old clothing business in which they made big fortune in 1901. Sir Abdullah Haroon was known as the Sugar King and his residence Seafield in Karachi became the centre of Pakistan Movement in Sindh. At the time of his death in 1942, Sir Abdullah Haroon was known among the wealthiest families of the subcontinent and his son Yusuf Haroon was Mayor of Karachi.

Because of their headstart in both business and politics, Memons emerged as the most powerful of all the industrial groups in Pakistan between1947-71 and Sergy Levin claimed that every fourth private factory in Pakistan in the 1960's belonged to a Memon businessman. Lawrence White ranked Dawood as number one among the top 22 families and his list included seven Memons among the top 22 and 13 among the top 42 families in Pakistan.

Earlier we have stated that several leading families resorted to Double D stratergy of Digging and Diversifying and covering their tracks in the post Bhutto era. Several of the celebrated families of 1970, therefore are presently operating in a very unobtrusive manner. It was during Bhutto era and immediately afterward that a number of them carried out a division of assets. In many cases, this division of assets resulted, as a stratergy rather than from family feuds.

The decline of Memon power can be judged from the fact that in 1970, Haroons had 20 companies in their fold, Adamjee known as the Jute King had majority shares in 30 companies, Bawany's controlled 20 companies, Valika had 20 companies, Dadabhoys 17, Jaffer Bros 17 and Karim 14 companies.

Today Rangoonwala-Bengali group, Haroon, Jaffer and Karim have one company each listed on KSE and the number of Memons and their ranking among the top 22 families has drastically gone down as compared to the 1970's.

In 1971 there were 13 Memons among the top 42 including Adamjee, Dawood, Bawany, Gul Ahmad, Karim, Rangoonwala, Haroon, Hussain Ibrahim, Ghani, Adam, Dada, Dadabhoy, Hasham but in 1995 their number among the top 45 has been reduced to seven i.e Dawood, Gul Ahmad, Bawany, Al-Noor, Fecto, Tawakkal and Yunus Bros. Ten of the top Memon Groups from 1970's have disappeared. Three among the survivors have drastically have drastically gone down in ranking while four new Memons groups have joined the ranks. Dawood on top in 1970 is now at number 8, Gul Ahmad at 9 and Bawany at 23.

Several leading Memons industrialists like Adamjee, Jaffer Bros and Fecto who were in process of setting up fertilizer factories and tractor plants in the 1970 had to abandon these because of the nationalization order. Investments by Memons was switched off, as if the leaders of Memon community held a meeting and decided to invest no more in Pakistan. The only projects of some industrial consequence set up by the Memons during last 25 years are Poineer Cable by Bawany and Pakistan-Synthetic by the Al-Karam group.

Memons are finished in Pakistan?

"Memons are finished in Pakistan. They have been wiped out deliberately" maintained Yusuf Haroon, the top Memon industrialist and first chief minister of Sindh after independance in 1947, in an interview with the author. He now lives in New York, in a flat overlooking Central Park and has business interests in the United States.

" Such a waste, all for nothing", he murmured in an incoherent voice while talking about the feverish movement for independance of Pakistan.

Haroon was bitter with the Punjabi politicians and rulers starting from the Nawab of Kalabagh, Zia-ul-Haq to Nawaz Sharif who wielded influence in Pakistan at different times as absolute monarchs but failed to unite the countary because of their chauvinism and narrow mindedness. He believed that the seeds of discontent against the federation were planted in smaller provinces with the shifting of capital to Islamabad and claimed that immediately after Pakistan was born and he was appointed chief minister of Sindh, Quaid-e-Azam asked him to look for a site to shift the capital from Karachi, Liaqat Ali Khan even visited and favoured a site proposed by him in Baluchistan, about 200 km from Karachi on the Arabian Coast.

A capital in Baluchistan would have generated employment opportunities for the native Baluchis and incoming Mohajir population and served Pakistan from many ethnic problems it was facing today, he argued. He claimed that it was Nawab of Kalabagh who prevailed over Ayub Khan to shift capital to Islamabad.

Haroon blamed Zia, for boosting Punjab out of proportion and launching a " systematic discrimination" against Karachi businessmen, Sindh in particular under which Liscenses, credit and raw material was monopolized by the Punjabi industrialists.

" Yes, several leading Memon businessmen fled from Pakistan. They were afraid of the Punjabi domination and possible nationalization", he concluded.

Note: Following is description of Memons by Gustav Papanek in " Interest Groups and Development".

The largest community to migrate to Pakistan were Halai Memons from Gujrati towns of Bantva, Dhoraji, Kutiyana and Vanthali. These Memons were Sunni Muslims of Hanafi school known for their specialization in the Kirana (spice) and textile trades. They were extremely cohesive, frugal, hard working, well-defined into family groups and had an overwhelming commitment to their traditional occupation of commerce either employees or as self-employed. Only a handful had left their traditional pursuits to become doctors, lawyers, engineers and civil servants. Memons had an extremely high sense of community identity, spoke Gujrati and tended to be organised on the basis of ancestral residency. They were specially strict about community endogamy based on township of origin and had well organized and developed community associations to enforce marriage rules and to moderate group conflicts. They were socially conservative and religious devout with a large number of hajis among their members. As a community roughly 100,000 Memons ranged across the entire socio-economic spectrum from very poor to very rich.

The Memons settling in Karachi moved quickly to fill the gaps left by the departing Hindu traders. They took over the textile importing business which had previously been the speciality of Hindu traders from this base as textile importers, they expanded quickly into textile manufacturing. From textile they moved into banking, insurance and the production of other consumer goods. Within a short period the Memons had become the most prominent business community.

Will the Memons rise from the ashes

The Memons are a bitter lot in Pakistan today. Several of their elders and leaders like Yusuf Haroon, M A Rangoonwala, Jaffers and Dawood have moved or shifted their business abroad and those who have not done so, lament the loss of their leadership role and the decline of their economic power.

" The pre-privatization era, specially Ayub's decade, saw a surge in industrialization with a fervent zeal. In another two decades Pakistan would have been ranked with Japan. Also the dwarfs in the political field conspired to dismember the country. Pakistan lost a lot of industries. And the Memons suffered the most. But did they complain? Oh, No. Alas, then the chairman from Larkana got his priorities all wraped up and succeeded in injecting a lethal dose in the veins of country's industrial base by rashly nationalizing industries. And the Memons suffered the most. But did they complain? Oh, No. They changed their course and were back in other spheres of business doing what they did best. Excel. Like the Phoenix, they always rise from ashes. And they always " will, wrote Majyd Aziz, a self-proclaimed, " proud Memon businessman.

An opportunity rose after the 1997 elections to bring the Memons back into the investment mainstream when Memon businessmen from Karachi responded to Nawaz Sharif's call for donations and contributions for National Debt Retirement Fund and Abu Bakr Sheikhani, president, Muslim League Karachi, pledged donation and deposit of 50 million dollars on behalf of the Memon business community. Appeals in newspapers on behalf of the Memon businessmen urged Nawaz Sharif to award a Senate ticket to Sheikhani. But other consideration weighed more heavily with Nawaz Sharif and Sheikhani was not given the ticket. With the result that Pakistan's biggest business community lacks representation in Nawaz Sharif govt adn the govt lacks their whole-hearted support. On the other hand, Chiniotis have at least two known parliamentarians namely Tariq Shafi and Qaisar A Sheikh in the national assembly.

Ever since the creation of Pakistan, the Memons, Ismaeelis and Chiniotis have quietly fought thier wars, away from the public eyes, to dominate the economic landscape. There was a gas-war between the Ismaeelis and Memons in the 1960 when A K Soomar, in cooperation with the Fancy group started work on Farooq Textile Mills, the first non-Memon textile mill in Karachi. A detailed accont of the gas-war has been given by Sergey Levin in an article, " The uppper bourgeoisie from the Muslim commercial communiy of Memons in Pakistan 1947-71." According to the account Fancy group could not build a textile mill in Karachi because of the opposition by Memons who had monopoly of the textile trade. However Fancies controlled the Karachi Gas Company which was supplying gas to textile mills. On the pretext of objective difficulties, fancies raised the prices of gas which were brought down to the previous level only when they had their textile mill.

During first Nawaz govt, All Pakistan Textile Mills Association (APTMA), not just came to be dominated by Lahore-based textile tycoons, it was split between the Lahore and Karachi groups. The Karachi faction was headed by Mohammad Ali Pakolawala of Gul Ahmad Textile while the Lahore faction was headed by Mian Mohammad Mansha.

The caretaker govt of Moeen Qureshi appointed Mohammad Ali Pakolawala as Chairman, Export Promotion Bureau but soon after elections, Benazir Bhutto came into power for second time and Pakolawala was replaced by a Chinioti businessman and industrialist Mian Habib Ullah.

The tug of war between the Memons and the Chiniotis is quite open and intense. The Memons call the Chiniotis " the Nouveau Riche" and to the Chiniotis, the Memons are "that lot of Pakistani businessmen and industrialists who have shifted a lot of wealth abroad."
 
 

The companies owned by Memons on KSC

 
S. No Name No. of companies
1 Dawood 16
2 Bawany-Alnoor 11
3 Gul Ahmad-Al Karam 9
4 Dadabhoy 5
5 Kasim Dada 4
6 Fecto 4
7 Tawakkal 8
8 Prudential 6
9 Karim 3
10 Hasham 2
11 Latif Jamal 2
12 Ghani 2
13 Adam 2
14 Yunus Bros 1
15 Haroon 1
16 Jaffer 1
17 Bengali 1
18 H A Dada 1
19 H A Dadabhoy 1
20 Suleman Haji Omer 1
21 Gatron 1

The Rise of Chiniotis

The Table of Contents

Ethnic Divide of Big Business

Robber Barrons of Pakistan