Zafar Sareshwala is waltzing through the glittering world of share markets with an unlikely couple: an Islamic priest on one arm and the president of a stock exchange on the other.
Sareshwala, 43, is one of the pioneers of Islamic finance in India, encouraging Muslims to invest in the stock market where the community’s participation is negligible due to religious concerns. It hasn’t been a year, but business is already booming. He has thousands of clients across 21 Indian cities and towns. A German bank chief — also the president of the Munich Stock exchange — is among his top backers, alongside leading Islamic clerics.
All that could have seemed only a fanciful dream in the spring of 2002 during the Gujarat riots. The building that housed his stock broking company’s office had been burned by arsonists; his employees fled even as online trading continued. Sareshwala, one of the most prosperous Muslims in Ahmedabad, was ruined financially.
“We were left with practically nothing,” he said, looking out of a car at Mumbai’s soaked streets on a rainy afternoon. “Our share price went to 50 paise, our net worth was totally wiped out. There was no way we could have gotten back.”
The riots choked off the 110-year-old family business of manufacturing valves. Sareshwala and his two brothers briefly considered — and rejected — the idea of even leaving the country.
"I had a UK residency, my brother had Canadian residency, one brother had a Saudi residency,” said Sareshwala, who went to a Christian missionary school, and studied engineering and marketing.
“But we took a conscious decision — if we were to survive and come back, it would only be in India, nowhere else,” he said, seated behind his brother Talha in the car. “I told my brothers — anywhere we go, we will be second class citizens. Not in India.”
But a comeback needed two things — a miracle and a big new idea.
The first would take some time. The second was no problem.
Innovation came easy to the Sareshwala clan, a sprawling bunch of engineers. When Sareshwala’s father recently designed a mosque in Ahmedabad, he wanted that it should not be claustrophobic in the city’s hot summers for the 400-odd devout who would come there. So he brought in experts who measured the amount of air they would breathe in and out when they sat together for 25 minutes. That decided the height of the mosque, and the effect of a chimney that sent hot air up and cool air down. The mosque now does not need a fan in the summer.
“My father is a very innovative person, and a very religious person,” said Sareshwala. “He was a big support for us after the 2002 riots. He said ‘this is an aberration, it is god’s will, and it does not mean it is always going to happen’.”
The search for his new business idea took Sareshwala back to 1988, when he had just moved to Mumbai, to work as a trader at the Bombay Stock Exchange.
“As a Muslim, as I was always wondering — the barometer for the financial health of any country is the stock exchange, and out of the 2,500 or more companies listed in those days, there were just a handful of Muslim-owned companies,” Sareshwala said, back at his office in the city’s busy Crawford Market.
“And when I used to go on the floor as a trader, there was hardly any Muslim. Among the members of the stock exchange, there were just one or two Muslims,” he said. “I used to think -— where have we gone wrong? After all, the exchange was not developed after the Partition.”
Sareshwala decided that Islamic finance was the niche he would pursue. He looked for partners overseas.
But those were tough times. The September 11 terrorist attack had taken place, the U.S.-led military campaign in Afghanistan had dislodged the Taliban, and the Iraq war had begun. Muslims were in the middle of a huge international PR disaster.
“It was very difficult to remotely associate with anything to do with Islam. So most Western banks suddenly developed cold feet,” Sareshwala said.
As he pursued his business revival plans, he began exploring his own religion to seek answers to some fundamental questions, which had been festering since the Islamic insurgency began in several parts of the world.
“This was dicey situation for me. When all these things started I started wondering — here I was, a Muslim, a practising Muslim, and all these things are being done in the name of Islam, so I wondered, have I chosen the wrong path? Or am I being apologetic about my religion?
“I started reading the Islamic books again and went to the scriptures again — what does Islam say about jihad?” Sareshwala said.
He found that the Quran had laid down clear rules of engagement if there was conflict between Muslims and non-Muslims — old people, women, children, the unarmed, and place of worship were not to be touched.
“So where do you have place for bombings - in London, in a train — this is not only un-Islamic, this is anti-Islamic,” said Sareshwala, who has lived in London for more than six years and was there when the Gujarat riots destroyed his business.
During those years, he was a family friend of the grieving parents of Omar Saeed Sheikh, the former London resident who was arrested in Kashmir over terrorism charges and released in exchange for the hijacked passengers of an Indian Airlines jetliner in 1999. Sheikh was convicted in Pakistan for the beheading of American journalist Daniel Pearl.
Sareshwala also had met a top Islamic cleric in Karachi who said he had turned down Osama bin Laden's request for endorsement for the al-Qaeda — but regretted that he had never publicised this decision widely enough.
“Unfortunately, I always felt that enough has not been done by the Islamic clerics. They should come out in the open and condemn these kind of atrocities in the worst possible way,” Sareshwala said. “People argue - ‘what about what is happening in Israel or Iraq or Afghanistan?’ I say yes, but that does not mean you bomb the innocent in London!”
As he fought the aftermath of terrorist attacks in his business, Sareshwala struggled to find funding for his business. He now had a business model: Islamic stock broking. His company would create an Islamic Equity Index that would separate the Shariah-compliant stocks from the ones that were banned according to religious guidelines. Parsoli does not, for example, invest in companies that deal with alcohol, gambling, gaming, casinos or pornography.
He shot off numerous e-mails to European companies, seeking help. Over several months, he realised he had run into a blank wall. Only a miracle could revive his fortunes. That miracle happened in the winter of last year.
A German investor suddenly became interested in Parsoli's operations. This was a man called Uto Baader, who Sareshwala knew little about as he called him in Germany last November. A minute into the conversation, Baader agreed to meet him.
When he e-mailed details about himself to Sareshwala, it was the kind of moment that makes people fall off chairs. Baader turned out to be the chairman of Germany's Baeder Bank and president of the Munich Stock Exchange.
Two weeks on, the 6’2” economist and bank chief was in Ahmedabad, making an offer Sareshwala could not refuse. He wanted to buy a stake in Parsoli.
“It was a miracle. I asked my brother, are we in a fairy world?” Sareshwala said. He bought a 10 per cent stake in the company, and was so impressed with its performance that over a year, he became a majority shareholder, but left the company's control in Sareshwala's hands.
From Ahmedabad to Moradabad to Kashmir, Sareshwala is reaching out to Islamic clerics who educate common Muslims on how there are many stocks they can invest in without having religious concerns.
“This philosophy is also appealing to a lot of non-Muslims. In fact, we now have 20 per cent of non-Muslims as our clients,” he said. He has now set up a financial services company in Europe, aimed at targeting 15 million Muslims who live in Western Europe.
Hundreds of Muslims come to his company's events in different cities, where he pulls out his final surprise - his Chief Operating Officer, a Quranic pundit, is a Hindu.
(Tomorow: A Young Muslim woman’s Gritty Journey)