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Last Updated: Tuesday, 5 September 2006, 23:37 GMT 00:37 UK
Handover time for Asian bosses?
By Ollie Stone-Lee
BBC News website

As part of our series on family firms, we look at the dilemma facing many Asian family businesses.

When is it time to hand over the reins?

Arjan (left) and Mitesh Vekaria
Mitesh Vekaria (right) is now working alongside his uncle, Arjan

That is the question facing many Asian family firms as they reach a tipping point.

Scores of family firms were set up during 1960s and 1970s, when many immigrants from Asia and east Africa arrived in the UK.

Now many of them are reaching the stage where they need to think about the succession.

That process is already under way at Vascroft Contractors, set up in 1977 by brothers Arjan and Shashi Vekaria.

The two brothers are now 52 and 54 years old, and Shashi's son Mitesh thinks they will never actually leave the scene.

"These guys will never retire," he says.

"But gradually they will release some of the reins they are holding.

"It is not in their nature to retire - that's just Asian businessmen. They do not want to burden anyone and they think they should be running the shop."

Succession plans

Despite that, Mitesh says the company is preparing for the future.

He decided to give up his job in the City as a chartered surveyor and join the family firm. Like other friends in similar Asian family firms, he is going on courses at the Institute of Directors to equip him for when he does taken over.

And the company is bringing in more non-executive directors and professional managers to ensure it does have the expertise in place once the older generation finally retires.

When people found out the people who the people behind the company were, we had some discrimination
Arjan Vekaria

"We have got a plan of how I will be managing it eventually," Mitesh says.

"I know a lot of firms have not thought about their succession planning in terms of making their young generation go off to do courses and things which would help.

"A lot of people join their business out of inheritance, and do not really know what they are doing."

The Vekarias were among the 60,000 Asians ordered out of Uganda by dictator Idi Amin in 1972.

The family initially took refuge in India, but in 1974 Arjan and Shashi headed for England to join their father there.

Within two days of arriving in London, they were working as decorators.

Moving up

Arjan moved on to become a construction labourer and eventually a building supervisor, before setting up Vascroft in 1977.

His father and grandfather had worked as contractors in Africa, he says, and he and his brother wanted to succeed in this new territory.

The pair chose to call the company Vascroft because it did not sound Indian.

"When people found out the people who the people behind the company were, we had some discrimination," he says.

"We had some difficult times where people said 'we don't think we would be able to finish the job on time and with quality.'"

African experience

But the brothers say they remained confident, and to dispel the preconceptions they offered bonds to their customers.

They were helped by contracts from other immigrants from India and east Africa, many of whom had bought up dilapidated hotels which Vascroft set to work refurbishing into deluxe accommodation.

"They had experience from east Africa that Indians were good contractors, reliable people, honest people, so this is how we got into the Asian hotel market," says Arjan.

Restaurants and corner shops are increasingly being taken over by East European immigrants who are going through what the Asians went through in the 1970s
Rupal Patel
INAB

In 1984 Vascroft won its first 1m contract. Now, it says, it can tackle projects worth up to 25m.

The Vekarias were not the only Asian family firm to encounter prejudice when they first arrived in Britain.

Rupal Patel, from the International Network of Asian Business (INAB), says the only way many of those immigrants could get a job was to set up their own firms and work for themselves.

They were also spurred on by the "100% rule": they knew that whatever they did, if they owned the business their families would get all the benefit.

INAB was set up earlier this year, to help people share advice at what is proving a crucial time for many Asian family firms.

But Ms Patel said some families were now moving from their traditional sectors into new areas, such as healthcare, pharmaceuticals and hotels - especially as their children came through university.

"Restaurants and corner shops are increasingly being taken over by East European immigrants who are new to this country and going through what the Asians went through in the 1970s," she says,

So for some Asian business, generational change means more than just handing over management. It can mean new directions for the firm too.


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