Bharti’s Mittals to give 10% wealth for charity
The promoters of India’s largest telco Airtel have decided to transfer 10% of the family’s wealth worth Rs 7,000 crore, originally earmarked to secure their children’s future, to the Bharti Foundation which is focused on philanthropy projects in the education sector, Bharti Airtel chairman Sunil Bharti Mittal said on Thursday.
Mr Mittal also announced a decision to deploy Rs 1,000 crore out of this corpus for setting up a new-wave Satya Bharti University of Science and Technology at a 100-acre campus in North India, which would offer an avenue for under-privileged sections of society to take up higher education free of cost.
The decision to give away the wealth was triggered at a fireside family chat on Mr Mittal’s 60thbirthday last month when he asked seven members of ‘generation next’ – three of his own children and the two children each of his brothers, Rajan and Rakesh — about what they should pursue in their twilight years.
“We were rather pleasantly surprised when the children said: ‘You have parked 10% of the family wealth into the children’s trust. Why don’t we move that into the Foundation?” said Mr Mittal, stressing that none of the children are in the group companies or their boards and are trying to make their own lives.
“So the three of us came together and took this decision, exactly a month after our children told us to do something. We are committing today 10% of our wealth that is about Rs 7,000 crore, into the Bharti Foundation, which includes 3% shares of Bharti Airtel because the new university will need some liquidity to run it,” he said.
Recounting the three brothers’ own struggles rising from the lower middle class and seeing the pain of people up close and personal — unlike most industrial families, Mr Mittal said that the Bharti Foundation was set up in 2000 when Airtel was still a young company and needed lots of capital. The Foundation has gone from an initial phase of ‘cheque philanthropy’ in response to demands for supporting projects from ‘NGOs, politicians, bureaucrats and important people’ to a smaller version of the Bill and Melinda Gates Foundation.
“Our large enterprise Airtel… everytime we came to a point where we want to do much more (in philanthropy), some market difficulties would come up. Now is no different,” he said, hinting at the distress in the telecom sector.
“But on the other hand, the clock is ticking away, I am sixty and can’t wait for this war to stop and then, do something. So we may as well launch ourselves. I think we will have enough to take care of ourselves and our children,” the Airtel chairman said.
Raising concerns about the tax treatment of philanthropic activity in the country, Mr Mittal said: “There are some tax implications if the philanthropy amount is given as a gift, which we are hoping would get resolved so India can become a more giving nation. Secondly, frankly, India is turning rich only now. It doesn’t have the benefit of European of American institutions that have 100s of years of wealth creation and we would see more and more Indian companies getting on to this bandwagon.”
The Foundation has already begun looking at potential sites in Punjab and Haryana for the university, with a view that it should be motorable distance from big cities like Chandigarh or New Delhi so as to be able to attract the best faculty from India and abroad. The university will begin operations in 2021, have a capacity to teach 10,000 students once fully functional (around 2023) and will offer courses in multiple disciplines.
“There will be significant focus on technology, on the lines of MIT, Berkeley, Stanford, in areas such as IoT, Robotics and AI,” said Mr Mittal, who said the plan is to keep education free for the poor and levy fees equivalent to government colleges for those who could afford to pay.
While a lion’s share of the Rs 7,000 crore donation will be invested in the university, the Foundation will also use the funds to ramp up the presence of Satya Bharti schools in the country, that currently educate 50,000 children absolutely free of cost in rural areas.