MUMBAI: It has reported that AM Naik pledged to devote 75% of his lifetime income to charity as he gets ready to step down from active leadership of the $16-billion engineering conglomerate Larsen & Toubro a year from now.
“Charity is a personal desire. In my case, giving has continued for three generations. My grandfather and father did not have money so they lived their lives for poor people,” Naik told Economic Times in an interview.
“I have committed to use 75% of my income for charitable purposes.”, said Naik.
He’s set up two charitable trusts — the Naik Charitable Trust for education and skill training and the Nirali Memorial Medical Trust, named after his grand daughter who died of cancer in 2007. Naik declined to give details of the amount spent so far and the money he will be directing to philanthropy going ahead.
According to the ET Intelligence Group, Naik took home nearly Rs 200 crore in compensation in 2010-16. In FY16, this included stock options awarded by L&T Infotech. According to a source aware of the matter, since 1995, when Naik made his first donation to a hospital in his native village in Gujarat, he has donated about Rs 125 crore to charitable initiatives.
An asset management company handles Naik’s money while his sister’s family assists him in philanthropy. Naik is currently engaged in building a school and hospital close to L&T’s Powai campus and is also keen on setting up a fire station there. “I want to carry out my charity work at my ‘janmabhoomi’ and my ‘karmabhoomi’,” Naik said.
Naik became the chief executive in 1999 and chairman in 2003.
His long stewardship ushered in rapid growth and diversification at Larsen & Toubro, transforming it into a global engineering conglomerate. His trusts run seven projects and two of these will be commissioned in 2017, one of them being a Vedic school named after his wife that will be inaugurated on her birthday.
Naik recounted how his father asked him to explain where he got Rs 4 lakh to donate to a hospital in his village in 1995 to add a floor. “He was such a principled man that he wanted to know the source of every penny,” he said. “I had to show him my passbooks! I started charity when I did not have much money.”
Naik said both his children are living overseas. “My son is with Google and my daughter has a medical practice,” he said. “Both of them are well settled in the US, and it is unlikely that they will return to settle down in India. As a father, I will always continue to hope that they will return to live in India.”
The succession plan seems to be moving seamlessly forward with SN Subrahmanyan, deputy managing director, seen as succeeding Naik when he retires in September 2017.
There have been hints that Naik may continue as non-executive chairman to guide the company, just as he plans to guide his charitable ventures.
(Economic Times, 26 August 2016)