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 Hever 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 what, 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 study 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, 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 nail 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.

Yeah, a good introduction to treasury, you know. So talk us through your, 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 Diwoo was a wonderful company for anybody to start a Treasury career because any financial instrument, you name it, it was there in Devu, whether you talk about big borrowings, we were the first company in India which set it up a big 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. 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 focused 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 Daevu, 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 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 Devu actually they faced with a 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 a head 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 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, 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 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 mean 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 devopos 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, 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, 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. 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, to, 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 Postbank, just focus on cash management, just focus on the liquid 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 Postbank actually came for that press conference. I remember I was, 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 tell 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 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 Nortel 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 stuff 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, Muldo, if we focus on the country moves, if you like, because that was your. Because you were doing Northern, it was. And then taking over India, but then Asia, Hong Kong and then, you know, did you 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 who. So that was also broadening your role. So it was more India focused earlier and then after I was given the responsibility of whole Asia. And actually that, that was the first time I started leading a team in Nortel. I mean, 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 chapter 11.

Chapter 11 with.

Yeah, yeah, exactly.

So you were working with Mr. Fremantle.

Yeah, exactly. At that time Mr. Fremantle 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 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 a Treasury in US as well. As I said, Telstra 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 hewa back in 2012 in Hong Kong. So the primary reason for moving to Heva was that I want to make my own employment. 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 a 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 in front 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 truly a global company. I would say it's also very rare to find company like Hewa which is not like in. From a turnover perspective is not so great. But if you look at the 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 broaden my scope and really put everything in a global perspective. Let's put it like this.

And then with your role in Treasury. 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 right, 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 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 you 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 this 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 Heva, I think we 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. How 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 know.

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 it that in that sense. And then. And then in terms of, you know, again, we are treasury career corner, where we talk about people's careers and the people, I think, aspects 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 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 like. I think 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, you know, to those remote guys you described 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 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 let 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. So you need to train your team there in China to make the thing, make them understand so that they can share the same vision with the SAFE or pboc and get you the right discussion. At least not approval, but right discussions.

Yeah, yeah.

So I think that's coaching part and the training part is very, very important. Don't try to, in my opinion, don't try to just give certain tasks without giving the full background, full discussion and full coaching and training. I, I think that's very important. When you manage the treasury team or the people at a central level, you're sitting in Netherlands, which is much more advanced from a Treasury perspective and you're dealing with the people in Mexico or in China or in Thailand. Just example where it's not so popular. I would say if I remember in my past career you talk about the intercompany global netting, netting of receivables and payables. Now if you think about these receivable and payable netting you will think not possible in China or it's not possible in rest of Asia countries. But with the right coaching, I can tell you in many countries we have got the central bank approval for this intercompany netting. So how we. I trained the team there to talk to the central bank in a more focused way and create a win, win situation for both the parties. And that worked. Heaver is also, I think that's very much in the news as well. HIVA is one of the few companies worldwide who has tried the intercompany loan from China. The liquidity in China was always a headache for the global treasures in the past. And back in, I remember, I think it was 2014 when central bank actually initiated this concept of where you can move the liquidity from China to global company. He was one of the first who got approval.

Yeah. And how did you do that what was the key to that? If you like, if there are other people listening going, oh, hang on, we should be doing, doing that.

Yeah. I think again, as I said, like, you have to work with a team. You have to make sure that your vision is shared with the team and you share that vision with the regulators, SAF and PBoC. So initially it was, I would say, I don't want to go into the detail because the story is there on the, on the Internet.

Yeah.

But initially it was very, very difficult because you are doing a process for many, many years like dividend payment or any other thing which you, which you can think of in terms of managing the local liquidity. But all of a sudden you try something different, you know, something different which is going to revolutionize the whole treasury of a particular country. It was very challenging from a, not only from the regulatory perspective, but from a local team perspective. The team was not, in my opinion, when you make this kind of change, the team is not very much willing to go through that change. So you have to do a lot of coaching, a lot of discussion, a lot of sharing ideas and train, train them as well. And that creates, my opinion, a win, win situation. And that creates the right motivation for the local team to talk to the regulator in more effective way and get you the right results. Let's put it like this before we.

Wrap up the show and we will, you know, soon and, but I don't want to run out of time. I wanted to sort of jump onto the future if you like. You've talked, we talked a lot about getting that coaching, get those guys on board, which I think is brilliant and some of the people listening today need to take that on board. Board, you know, think about the way that you dedicate your time to doing that and how you achieve results through that. But as you look towards, say the future before we do the wrap up, you know, what are you seeing the future challenges for your group and for treasury as a whole? You know, there's lots of, lots of turmoil in the world at the moment. Lots of different challenges coming us, you know, and viruses and a lot. But what are you seeing in treasury terms? What are the things that you thinking, you know, that's, that's the challenge coming down the line. What are the things for you?

I would like to say that from a Treasury functional side, the risk management will continue to dominate the treasury area while system are going to solve most of your work, regular stuff. So while you can see a lot of systems are available in the market which can make your life much more easy in terms of the regular stuff. But I think the focus will remain on the risk management and team management. How do you manage the treasury team in terms of their training, in terms of coaching, in terms of developing the leadership within your treasury team? I think that will remain focused in future. I would say excellent.

Right. The wrap up for today's show, we do it every time and we say look, you know, we'll put in Rajan's details LinkedIn profile. So if it's good to have you in the network and it's going to be valuable to him and to you, then he'll connect with you. But you look back over his career and you go, do you know what? I'd like to do that. I'd like to make the moves he's done. And you think that's the sort of treasury career you want as a Treasury professional listening today. What are the things that you would summarize, Rajam? What are the things that you would say do, do this, don't do this or these are my tips for the top tips for the future. Over to you.

I would say the tip for the future or basically what I like it and let's put it like this. I believe that you should love your job, you should enjoy and do whatever makes you happy. In my opinion, take new challenges. I think that's what I have been doing because that gives you this feeling of fulfillment, satisfaction, will bring you joy and keep macro picture always in mind. So while you can always drag into the micro side of it but keep the macro thing in mind because that will help you to create the right excitement and the right level of attention in your organization and keep believing you.

Would you say that? What do you mean?

I mean say if you believe on certain solutions are good for the company or certain things are good for the company, just believe and have persistence, have patience to implement those and in the.

Face of someone saying no, we are doing that work.

Exactly, exactly, exactly. So keep believing.

You keep believing in yourself. Yeah, there you go. That's what a lovely message to finish. Keep believing yourself. Treasury guys out there. He can, he's achieved it. He's got to the group treasurer job. If you want to do the same then well, believe in yourself. What a great enter today's show. Thank you sir. Thanks for your time again. We'll put your details in the show notes, notes in the LinkedIn. We can connect with him if it works. And thank you very much for your time today.

Thanks a lot, mate. Thanks a lot.

Thank you sir.