14 May 2012

May spotlight: Sunil Shah

In our latest monthly Spotlight, ICAEW member Sunil Shah recounts the journey from accountancy, to investing, to novel writing

No four-year old plays "Accountant" when he’s pretending to be an adult with his friends. I certainly didn’t. No, for me it was "Pilot" - that was my fantasy as a toddler in the dusty streets of Nairobi.

Nearly two decades later I was showing my graduation certificate (from The London School of Economics, a BSc in Economics) to any investment bank that might listen. You must understand the era, no colleague with any street cred would condescend to accountancy: "Are you crazy? Haven’t you seen Michael Douglas in Wall Street?"

Alas, fluent Swahili and Gujarati weren’t quite the linguistic repertoire they were looking for, and with my head bowed low I entered the graduate intake of KPMG in London.

I joined a Business Services department, where the diversity of clients kept me sane during those gruelling ACA exams that displaced a social life. Those were tough years. The most memorable event during my slog was an audit where I was given the task of reconciling the monthly cash of a distribution business to the bank statements.

You develop an instinct, a sixth sense of where things might go awry

Sunil Shah

It was prior to the days of a ubiquitous PC and, using a calculator with a printout, I’d done each month of the year successfully to the penny. But October, oh October! After 36 attempts, I gave up. The numbers didn’t add up. They were off. By exactly one pound. 36 times.

A few days later, I presented my audit file to the partner who came to the client to sign off on the job. He flipped sagely through the pages of my file and paused: “It doesn’t reconcile in October, it’s out by a pound.”

I reached into my pocket and offered him one.

He shook his head, peered through his bifocal lenses and said: “Under by a million here and over by a million there…and it nets to a pound. Not good enough. Go find it. I’m not signing off until every month is reconciled.”

It was years later that I realised he was right. Not specifically for that audit, but in general. Things have to add up, and if they don’t, for the tiny sample that auditors select, it casts doubt on the entire picture.

This is a long-winded way of saying the ACA training is unequivocally the best foundation for understanding business.

I joined Coronation Fund Managers in Cape Town in 1998, where I was the mid/small cap fund manager for seven years. There’s no doubt that the ACA helped steer me away from some of the dotcom disasters (although not all!) and bag some winners. During one fund presentation in 2003 where I held the best one, three and five-year record in my sector (all the more creditable as my fund, at £130m, was the largest in the sector), an investor asked how I could monitor the 40 companies in my fund singlehandedly.

“There might be a hundred things that can potentially go wrong in any company,” I replied from the podium, “but you develop an instinct, a sixth sense, of where things might go awry…and you chase it like a bloodhound until you know for sure. After a while, the financial statements jump up and tell you a story.”

I realised telling stories was my passion during my next position as strategist for Coronation, where I wrote a large section of our quarterly newsletter. In 2005 I left to become an author. (Coronation is still one of the success stories in South Africa - don’t remind me of the share options I left behind!)

After blundering forward (and often backwards) in isolation for four years, I joined the Masters course in Creative Writing at the University of Cape Town which made it clear that, unlike accountancy, the art of writing is not based on rules learnt and applied, but an inexplicable and delicate process of osmosis.

The White Man's Numbers

Seven years into my new career after Coronation, my first novel is about to be published: The White Man’s Numbers (left) is a fictional financial thriller about capitalism and its pitfalls, seen through the rollercoaster lives of four characters in a fund management house.

Something like Grisham’s The Firm, but in the domain of stockmarkets, where the joys and blunders of the protagonist, Ravi, help to demystify the intriguing but jargon-infested world of money.

Every character and incident is a derivative of real people and events; Nigel the serial optimist of an IT start-up whose killer app will usurp Microsoft; Christopher, Ravi’s boss, who turns dramatically from benevolent mentor to ruthless corporate opportunist; Arnold, Precision Engineering’s founder and CEO who refuses to admit even the most rudimentary finance principle into his conglomerate.

The timing of this novel could not be more opportune, as the world reappraises our economic system.

It asks whether this particular strain of capitalism, replete with cronyism and a corporate casino mentality, has a future. Ravi, the protagonist of the novel, personifies what it takes to get ahead, and the price one inadvertently pays for it.

And yes, there are some parallels in Ravi’s life and mine.


Sunil Shah is a writer and investor, and lives in Cape Town. The first two chapters of his book can be found on his blog