"Transparency in personal property will benefit the King"
Prabhakar SJB Rana is associated with Soaltee Enterprises Pvt Ltd., a holding company of members of the Royal family. Though he is Chairman Emeritus of Soaltee Hotel Limited, he says "it is purely an honorary title as the designation itself represents", and as such he "is not involved in any business these days" since he has handed over everything to the new generation for quite some years. "Therefore, I'm not really entitled to speak with the media," he says. However, he accepted our repeated requests to share some of his observations about the political and economic scenario of the day including tourism and hydro power sectors (the two businesses in which he had considerable experience) as well as helping to clarify some misconceptions about the King's wealth. Excerpts:
What are you doing these days?
I am not involved in the Board or any decision making level of any company. I have handed everything over to the new generation. I sometimes give my opinion when they ask me for it, but I try to discourage even that because, I fear, it will breed a dependency syndrome. In my opinion, one of the reasons for us, Nepalis, lagging behind is that while we are ready to give responsibilities to the new generation, we want to keep the authority with ourselves. As I have handed over my authorities and responsibilities to the new generation, and I'm not involved in any activity, I have no idea about the current business situation.
How do you analyse the present state of the economy?
One of our peculiarities is that we tend to be either extremely optimistic or extremely pessimistic. But life is not like that. There was drastic change during the course of those 19 days (in April) and it naturally takes time to regain stability. Now people are making different guesses. Some say that Nepal will be like Singapore but others say that the Maoists will kill us all. Now that the situation is getting normal one can make more logical analysis. For instance, I see that the Maoists are perhaps not in a position to retrace their steps. Differences between the Maoists and other groups are narrowing. This is a positive sign.
On the negative side I see that the government, political parties and the Maoists themselves are in a state of flux. What we must understand is that the problem like this cannot be resolved overnight. It takes time.
Do you see any sign of improvement in economy or is it getting worse?
I hear that there is an improvement in tourism. This is a positive sign. However, we have already reduced the room rate to such a low level that now it will take time to raise it to the previous level. You cannot raise the prices unless you make some improvement in the quality since low service affects quality. Though our service quality is very high, we have to compete with many countries as they too have raised their quality substantially.
While Soaltee was the only hotel with a casino till a few years ago, now so many others have opened casinos. How has that affected Soaltee's business?
Not only Soaltee, every hotel could have a casino. It is not justifiable to stop other hotels from operating a casino. At this point, what I want to say is that the number of casinos is growing but the operator is the same. If we really want to expand casinos, we must expand the number of operators too. If we really acknowledge the contribution of casinos for the promotion of tourism, we must pay proper attention to its development. Only permitting more hotels to run casinos is not enough. The casino operator we have is very small one by world standard. In Macau and Singapore , they bring big operators from places like Las Vegas . If they can do that, why shouldn't we? In fact, no international gambler comes to our casinos as we have no such facilities which attract them. And the small operator we have cannot provide such facilities. There is no doubt that what we actually need are international standard tourists. Once that is accepted, we must think of ways to bring them in. It doesn't matter whether the number of tourists is growing fast enough. Our main concern should be the amount of dollars we earn from them.
You talked about tourism. But what about the way the whole economy is heading towards?
No business can flourish without peace and stability, without which we cannot expect good governance either. As a result, the economy cannot run smoothly. On the other hand, businesspersons should not always blame the government for everything that goes wrong. They would do better by introspecting about their own strengths and weaknesses. Despite all the adversities, some Nepali companies that have good management practices are doing pretty well even from international standard.
You brought Panda Energy, the foreign investor, into Bhote Koshi Project on your own initiative at such a time when foreign investors were hesitating to invest in Nepal . Panda has recently withdrawn from the project and you bought their shares. Why did Panda withdraw? How has it affected the dealings of Bhote Koshi with the Nepal Electricity Authority (NEA)?
First of all, I am neither authorized nor knowledgeable to answer your two pronged question, since I am not in the loop of this very complex and delicate stage of negotiations. Therefore, those of you who heard the Chairman of Upper Bhote Koshi Hydro Power Company at the Himalaya Hotel some months ago must draw your own conclusions as presented then. I am sure, when all knots and bolts of this arrangement are tidied up, hopefully before the end of the year, the press will have a further full briefing then. Since this matter has many legal and financial implications, it will be inappropriate for a man, who is not involved in its working, to give his opinion on this delicate issue. I would like to caution the press to refrain from any guess work or hearsay at this juncture. This involves international financial matters, which are delicate in nature and carries legal and financial sensitivities till the entire deal bears fruit for all concerned. Have patience till the whole matter is completed. All I can say is Panda Energy moved out due to the change in their corporate policy and showed their appreciation in the easy exit that was provided to them by Nepal . For any FDI an easy entry and exit is required, and I believe, this was provided to Panda at a reasonable pace, which is good for any future FDI's involvement in our country. I am given to understand that the company looks forward to fulfill what was enunciated by the Chairman in the past and am confident that it will have an amicable working relationship with both our financial partners and the customer, which is the Nepal Electricity Authority, for mutual benefit. I am as eagerly awaiting as you are for the final completion of the negotiations on this, which I consider a path-breaking project.
How do you analyse the Maoist policy?
So far we are attuned to their political speeches only. So, their policy is still not clear. When and if they enter the government, their policy would become clearer. Perhaps their policy becomes clearer when they run for elections in the coming days and bring out their election manifesto. Remember, all our political parties and their leaders are good in making commitments to people. The Maoists, being the newly emerging force, may even promise the moon. But in reality, these commitments when not fulfilled create discontent. In other words, our politics lacks honesty. So, people cannot put their trust in the leaders. After the political change, the people now hope that the country will be like a paradise in no time which obviously is not a realistic expectation. That would be possible only when every Nepali works hard for that end. If we want our country to be developed, we should stop looking at others to do it for us; we have to do it ourselves.
Let's change the context. When did you last get an audience with the King? What transpired?
I do get audiences with the His Majesty, but obviously I cannot disclose what transpire. Let it suffice to say that discussions take place on all types of contemporary subjects including political, economic and social situation of the country.
How do you find the King's current thinking?
I think His Majesty has realised what happened recently. He has understood that the future of the country including monarchy can be secure only in a democratic system.
You are regarded as the closest business partner of the King. How close?
I have said it many times that Soaltee Enterprises is the holding company of the royal family but I have no idea about how many shares each member of the royal family has in it. Soaltee Hotel, which was a privately company in the past, is now a public company and its shareholding is transparent. So, everyone can see that Soaltee Enterprises holds 39 per cent of its shares. Himalaya Tea Garden is another business in which the royal family has just over 50 per cent.
And as you may recall, ITC and Rana Group were the two promoters of Surya Tobacco Company when it was first established. The British American Tobacco held only a small portion of the share. Ten percent of the shares on the company belonged to Soaltee Enterprises under the second group.
Perhaps you know how much wealth the King has?
No, I know nothing about the King's private wealth. I know only about these three companies in which I was involved. I know only about those in which I was a partner. I have no idea how much wealth the royal family has. How will one know about someone else's wealth? Do you think I can have an idea of your wealth? That is what private wealth means, isn't it?
How do you see the way the questions are being raised about the King's wealth?
This is quite normal. Everywhere in the world, people are now demanding transparency in personal wealth of monarchs and rulers. Such transparency in the personal property will be for the benefit of the monarch or ruler also. Now the issue of taxing the King's income has been raised. The reality is that almost all kings and queens in the world pay taxes. As far as I know, tax has been paid also in our country. If you go and check in the three companies I mentioned, you will find that all of relevant taxes including income tax and dividend tax are paid. I wonder whether those very people who are raising the issue of taxing the king, are themselves paying the tax or not.
It is heard that your relations with the King have been cold these days. What is the truth?
There can never be differences between the King and me because he is the King and I am just a citizen. I am not a politician either. It is possible that in some cases, the King's views would be different than mine, but differences or coldness are both strong words.
