Why You Should Embrace Challenges with Rajan Gupta

So welcome to this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they built their careers, where they are now and where they see both themselves and the treasury profession. Going to next this week's show. Delighted to be joined by Rajan Gupta, the global treasurer and head of tax at Heva holdings based in the Netherlands. As we said just before, trying to get the right enunciation of Heva, but founded in 1979 in the Netherlands, they are one of the world's leading providers of innovative efficient transport solutions for commercial vehicles and environmental service industries. Over 20,000 customers, 40% global market share in front end tipping cylinders. The solutions move the world as it says on the website and things like that. But you know, as always, I'll get Rajan to explain that a little bit more later on because present globally lots and lots of manufacturing bases and a really big, big industrial group. But actually we'll get to that later. I wanted to start Rajan's journey first when he was based in India and started and then discovered finance, discovered Treasury. Maybe it's over to you, sir, it's your part of the show. Over to you.

Yeah, sure. Thank you. Thank you. Mike rightly said I was in India so I'm from India and finance, keep aside treasury which is a very specialized area, never in my radar. I always studied science, mathematics in the past. My first encounter, let me put it like this, my first encounter with a, with a finance related topic was during my Bachelor of Law LLB when I specialize in tax and tax function, I would say created the enough excitement to explore the finance area and then come to the MBA finance, which I did, which gave me enough opportunity to expertise finance and more in a more broader way in the finance study. Let's put it like this, I like the areas which are closely connected with a Treasury like cash management, risk management, international finance and things like. So basically I moved. I like those study in the finance or MBA finance. In terms of my career I had options to work for a bank and many of my friends actually done that. However, I decided to go corporate side and the final name to move my career definitely in the, in the corporate side was my first job in Devo Motors and that job created right excitement and challenges which I was looking for. So it was like it was actually quite challenging. A bit difficult as well because initially I used to work like 12 to 15 hours in the day. It was a debut, it's a Korean company. Work was like Workaholic people. And it was quite challenging. But I would also say, like, it was quite satisfying as well.

A good introduction to Treasury. So talk us through your treasury role there, if you like.

Yeah, sure. So actually I landed up as an executive finance, but the job was more treasury focused. And let me put it like this. I would say Divu was a wonderful company for anybody to start a Treasury career because any financial instrument, you name it, it was. Then, whether you talk about big borrowing, we were the first company in India which set it up a big factory for exporting engines to car engines or truck engines to the European market at that point of time. And it was almost like investment, more than a billion dollar at that point of time. And it was a massive investment and it was quite a reputation. I mean, it was quite a price job that you work for Davu Motors. So in Davu, actually my primary focus was, or the Treasury Department focus was more on the cash management side. So cash management, liquidity management, investment management, these were the focus area there.

And then, you know, that was your introduction to Treasury. So big team, small team, or how did you start to learn if you like your treasury, your craft, as it were?

Yeah, so in Daewoo, I think it was a quite a big team. I think we started with a department of 15 people and there was a head of treasury who was also a Korean guy. Actually it was a quite big treasury team and teamwork or team coordination was key there also. I think it was, it was quite challenging. As I said earlier, like every, every day you have something new to explore, something new. You are working on some new instrument, you're trying. And also later, point of time in Daevu, actually they faced with the financial crisis as well. So while, you know, somebody can say that it was, yeah, why you work for that company, but I think that is also enough challenge for a Treasury professional. How to keep the company alive, you know, how to keep the liquidity, cash management, risk management intact, how to deal with your bankers to keep the company from going through a greater financial crisis. Let's put it like this.

You had your first four years in this Indian subsidiary, as it were, but then you made a move to Deutsche Postbank. How did that move come about and things like that. Talk that through.

Yeah, I think, you know, as I said earlier, Devu faced financial difficulties. So I didn't want to leave Devu because it was a fantastic company. Let me put it like this. I consider myself lucky to join Devo Motors in the beginning of the career and not join a Bank, let's put it like this. But at some point of time you had to, you have to leave because you have to make a decision what you want in the next year in your career. I got this fantastic opportunity to join Deutsche Post Bank. I think it was also very good opportunity, very good move. If I think now you know, I was ahead of treasury in Devopos Bank India. I was given the opportunity or challenge to look at the innovative ways of financing the company. Because if you look at the housing finance business, housing finance business is very close to the banking side of it. You get the money from your depositors or basically from the commercial market, the commercial papers or bonds. And then you have to fund to your home buyers who are looking for buying homes. So the margin is very thin. So you have to really try some new thinking in order to gain market share, in order to gain a spread or increase your bottom line. Just let's say. So I was given the task to try some innovative structure and that's what did in that company. We did mortgage backed securitization with a premium structure for the first time in India. It was very, very challenging. I mean so we can talk about hours about this, how this was made successful without any investment banker. That was the first time I tried a structure launch a structure in the market without investment banker. I was doing the roadshow, talking with so many people, so many banks, you know, and giving them presentation without any investment banker. But at that point of time I had a support of. I used to report to executive director and he was quite experienced in the finance industry. So he had many fans who also consider us in the sense like they give you the opportunity to present while they invest or not invest. That's their decision. But they give you the opportunity to represent the company and listen about your plans. Now that was one part of it, the second part of it that in later we also found that the mortgage backed securitization which is an innovative solution, the market for the premium structure dried up. So we had to again try some new thinking. And then this new thinking really impressed me and the industry and my company at that point of time was mortgage backed securitization with a guarantee structure. Now this is a guarantee which is to be provided by the central bank. And I think this is not a joke but I mean just you know how the central bank work in the past. Now they are much more efficient, they're much more reflecting what is going in the market. But talking about 2004 in India, it was a really big challenge to get something from the central bank to guarantee our structure. And that faced me with a lot of criticism inside the company. And basically people were thinking like we are just trying something which is impossible and we are wasting our time and we are wasting move to other source of funding. But I was very much convinced that this is going to be the win win situation for the central bank and also for the U Post bank. So I used persistent nature and follow up and creating win win situation and giving them more idea actually succeeded. And we were the first company in India who launched mortgage backed securitization with the guarantee structure from the central bank. And those structures are very much, very much still alive and exist.

And how did you, you know, for those listening, we're talking about you five, six years into your treasury career. So you know, you were young at the time, you were, you know, fresh to treasury. And again we'll have people listening going crumbs. How did he get that across the line? But what I mean is not the actual technicalities but how did you as a person just believe in that, say actually we're going to do this guys.

So I always believe that I should enjoy wherever I am. That's my goal of my life, my career. So if I'm spending like eight to 10 hours in a job I should enjoy. I love challenges and where the challenges are, there are obstacles for sure. And we face. You will face a lot of criticism as well. But you know, these challenges will give you the feeling of fulfillment, the feeling of satisfaction, will bring you joy after short term difficulties, let's put it like this. They create the right excitement and they also give you opportunity to celebrate, you know, after this. Yeah, you're right. I think this was five to six years in my career. I mean say I had opportunity to just heading the treasury department of Deutsche Post bank, just focus on cash management, just focus on the liquidity management. And the company would not say anything. But if you go outside of your role and do something extra, I think there lies the satisfaction and you have done something different and that gives you the feeling of joy after it is completed. I remember that at that point of time my central bank actually decided that we should hold a press conference about this structure. Governor of the central bank and people from Germany from Deutsche Post bank actually came for that press conference. I remember my boss actually insisted that I should be on the dice, I should be on the dice. And that was really against the protocol of a central bank to have somebody who is not so senior on the dice of the press conference. But My boss insisted and I was on the dice. So it was again after you feel a lot of criticism, difficulties, but the reward is quite fulfilling, I would say.

And so you were there, you were based in India and then you became the well joined Nortel networks. Talk us about that and that move because you know you were based in Hong Kong or you know an international move or how did that come about?

Yeah, okay. So actually what happened with Nortel actually no tail was also a classic story, I would say. Nortel was quite a small in India back 2004. They had turnover of about 40, 50 million US dollar. But due to the strategic move or basically capturing or bas enhancing Indian market, enhancing their presence in the Indian market or let's put it like this, Asia Focus. They decided to pick up a contract from a very big telecom operator there. And this contract was in billions of dollars. And then they faced a lot of challenges because they just thought from focus side that they want to enter India, they want to do business in India, but they didn't know about Indian regulations and all those things. So they faced a lot of challenges from a cash management, from the regulatory side. Because in regulatory side you have to pay to your overseas companies from which you purchase material like 60, 90 days or things like. Whereas you will get or not till India would get the money from the telecom provider after few years. So there's a big cash flow gap as you can see. So they were looking for somebody who can do some innovative thinking in terms of the cash management, in terms of liquidity management and regulation. And I thought this is a good move because this will basically this was also in line with securitization concept. And they were looking for somebody who has treasury experience but more focused on the securitization. So since I have done this exercise in my previous job, I jumped to Nortel. They gave me an opportunity to lead nor tail India Treasury. Thus they have given me some other countries as well. But primary focus was India. So we had also done a lot of innovative thinking there. I don't want to go into this structures which we put together and what are the challenges. But it was, it was a quite a challenging task itself.

I was gonna say, you know more though if we focus on the country moves if you like, because that was your. Because you were doing Northern, that was. And then taking over India, but then Asia, Hong Kong and then, you know, did he move location wise?

Yeah, sure, sure. So what happened? After two years in India they decided move me to Hong Kong. And I was based in Hong Kong from 2007. So 2007 is the year when I moved to Hong Kong and they're giving me the responsibility of the whole. So that was also broadening your role. So it was more India focused earlier and then after I was given the responsibility of all Asia. And actually that, that was the first time I started leading a team in Nortel. I may say I have a team leading experience in the past, but Nortel, it was an individual contributor role. But when I was in Hong Kong, this was a team of four or five people who was looking after the whole of Asia treasury. So it was also quite good move. But Nortel, I think we all know they had to file the bankruptcy protection. Chapter 11. Chapter 11, yeah, yeah, exactly.

So you were working with Mr. Fremantle.

Yeah, exactly. At that time Mr. Fremental was also there and I was in Asia. He was looking after the EMEA region. And because of this bankruptcy protection thing, I decided to move and I joined Telstra, which is Australia's largest telecom. Very much a stable, very much solid company, I would say. Very nice working culture, very nice office as well. And I joined this in Hong Kong. So that was a move within Hong Kong. Actually this was also funny side that I moved from one building to another building within, within a kilometer range in Telstra. That was my first encounter with a global treasury. Let's put it like this. Let me clarify here that I was a global treasurer for Telstra's international business, which is anything which is outside of Australia, which is a very significant part of the business as well. Then you start dealing with a treasury in Europe, also Treasury in US as well. As I said Telstra to a great company, great working environment, great leaders. But I thought maybe it's not the right time that I start in a settling in mode because everything was more or less fixed. You have to work in a certain dimension and within the dimension, yeah, you, you are expected to act. Changes are minimal, I would say. So I decided to move and that's how I joined Heaver. I joined in heaver back in 2012 in Hong Kong. So the primary reason for moving to Heaver was that I want to make my own impact. I want to do something different, you know, so that, that comes with the, what I explained earlier. I like, like challenges because that give you the joy, satisfaction after all.

Until again, if you could tell for the listeners, I alluded to a little bit there. Tell us about the group, tell us about the size of it and everything else.

Yeah. So HEWA is Dutch multinational. We have operations, factories, offices in about 32 countries globally. In terms of. I think you have already explained that we have over 40% market share end cylinders or we call it front end tipping. So that's true. So we are market leader in that field and in terms of our major activities. So while we are Dutch company we are everywhere in Europe but majority of our revenue come from Asia and China is our single largest sales entity in the group while we have operation in north and South America as well. So it's a truly a global company. I would say it's also very rare to find company like Heaver which is not like from a turnover perspective not so great. But if you look at Reach, this is really spread it. I mean say we are selling almost like 150 countries and things like. So it's a truly global company and a lot of nationalities in the group and in the headquarter as well. So I think that really gave me a really broadened my scope and really put everything in a global perspective. Let's put it like this.

And then with you know your role in treasury so. So again tell us about the role of the global treasurer for the group. What are the challenges you face? Is it cash flow, is it foreign exchange? What's the thing that not keeps you awake at night but things that you think that's got to be our chief focus.

So I would say Kiva, if you look at in the current environment, I think all the treasury related stuff is challenging itself. I mean say one of the major challenges which we have at the moment are related to risk management. Let's put it like this. So when we talk about interest rate risk, when we talk about the foreign exchange risk, when you talk about commodity risk, I think these are very important challenges ahead of us and always I think will remain from a funding perspective is also very challenging given the market and especially today's market is very different because people are worried and liquidity is bit lower. So I think that's also a big challenge. But if we talk about other side of the treasury which is liquidity management, investment, cash management itself is very important. You have to make sure that the right amount of money is at the right moment and the right place and if you have a surplus then it should be in a group at a place where you can invest, you know. And then the system side is also important. I would say not a challenge but I think it's challenge from a perspective, from a change management perspective. But I think it makes your life much more simpler. It will give you enough time to focus on the Strategic things rather than regular stuff, which is a payment receivables and reconciliation and all those things. So.

So I was going to say in treasury terms, you know, a lot of people centralize or treasury, that's it. Give us all your money, we're in charge and everything else. But I know one of the things that we spoke about before and we looked at is you give a bit more autonomy to a lot of the group and different people. How does that work sort of in treasury terms? And what's the sort of the structure, if you like, or the ethos? That's probably the best way.

So in heaver, I think we are also centralized treasury, so. That's right, the treasury is centralized here in Netherlands. But as you rightly said, we do give a lot of autonom to the local people. So if you have money lying locally and it is not invested right in the right instrument, I think what we are looking for is to get the money out and put it in the central pool. So we have a notional cash pooling system and where you can park your money. But it's not like we really force people to do that automatic basis. We give them opportunity. You justify, you know, how much money you need for working capital purposes. Just example. Or if you can invest money in a better way than what we could do here in the group. Yeah, of course, we are open for that. We do a lot in a lot of entities. We allow local investments because those local investments may yield a better return than what we get in the group.

Are you then concerned about the volatilities, if the different countries or, you know, how does that then work? Or how do you manage that sort of risk, if you like?

Yeah, right. So basically we do that. We basically do the risk assessment before allowing anything. I mean, if you park your investment where you should park, how much you can park, which instrument you should use, which country we allow. So it's not like we give kind of general guideline like you were allowed to put the money in investment. We decide we have a control. We do like what you call maximum allowance, what you can park with a certain country in certain instruments.

So you manage that in that sense. And then. And then in terms of, you know, again, we are the treasury career corner, where we talk about people's careers and the people aspects of and things like that going on to that side of things. How do you structure it? You've got some of these managers out there and things. But in treasury terms, what's your ethos around people and managing people throughout the.

Function of things I would say like in the current treasury team, I think it's not big team but at the same time we do have a support. So we talk about like 32 entities globally. All these entities have finance managers who basically with the cap of treasury tax or any other function during the day. So these are people who are your ears and eyes on the ground. So if you want to implement something locally in Thailand or in Mexico, I think these are the people who help you. And this is what the management part is important. I think what I my leadership style is that what in my view works well, that you have to be empathetic while heading a team. You know, I think you have to develop a leadership what you are experiencing, I mean, so you should pass on to other people, they should see some value creation by you. Yeah, that's also important. And also do a bit of a technical training. So while you can say to a controller or a finance manager in Mexico, you have to implement this. But I think it's also important that what is there, what is in it for that finance manager, how he's getting the benefit. So maybe you go into the technical discussion or train him or mentor him, whatever you you like. I think that's, that is important because that creates a win win situation. Then you create enough excitement in your team and they will execute and then they will execute with passion, with excellence. And that's what I have been doing and to be honest, that has been successful in my career.

And how have you done that to those remote guys? You described it a little bit there and I think this is interesting because there'll be people listening today say actually I've got five or six dotted lines around Europe or I've got them in Latin America or different regions and they've got to influence and coach and sort of try and get those guys on side. How do you do that? You know, what's your, what's your secret? You said there a little bit about trying to give them some coaching and about trying to inspire them a little bit. But what other ways do you do it?

I think training is very important. Training is very important. Just example we face, not in this company but just generally suppose we actually to be honest, like a Treasury is much more advanced in Europe, let's put it like this, or in America than in Asia. Now if you start, if you want to implement something in China is very different from implementing something here, you know, so then you, once you formulate your policy, when you, once you formulate what is your vision, what you're trying to implement. Coach them, coach the local team, local finance controller, you know, make them understand. Bit of a Treasury side of it. So what treasury does and how that influence what, why you decided certain things or certain action, what are the motive behind and how they should approach to those. Those things, what are the benefits of those things to the local team? Now, if you. That things become more complex, if the regulatory is also involved. Just example, if in China, we have to deal with the regulator, like safe, which is a foreign exchange regulator, and pboc, which is the central bank of China. Now, if you want to implement something with approval from them, of course, the people sitting in central bank and safe, they need to understand your situation. Yeah. So you need to train your team. There.