Monday interview: Srinivasan Venkatakrishnan, AngloGold CEO

Srinivasan Venkatakrishnan had just left the cold store when the meat cleaver was slammed on to his table. It was half past four in the morning at London's Smithfield market, and the future chief executive of AngloGold Ashanti was getting an early lesson in the heated emotions of business restructuring.

London's main wholesale meat market is daunting enough for any outsider. That day, poring over financial records at the back of a butchery stand, Mr Venkatakrishnan was in his first job for Deloitte's corporate recovery team. He had sought the post because he wanted to "get his hands dirty". Now he had frozen a trader's bank accounts - and an unpaid supplier was making it clear that he would like the accounts unfrozen, quickly.

"Trying to explain to a bunch of meat traders why we are here, that the bank has a problem and that we are here to help and can we find a way of working together? . . . Hey! - that response was not pleasant," he says.

"All of a sudden a guy walks in and - bang. There's a meat cleaver, whack on the desk, and he is saying 'I want my money.' We said, 'Sorry, we can't give you your money," recalls Mr Venkata­krishnan. "He is not happy, but he goes away . . . That was my baptism of fire. But we successfully turned that business around and sold it as a going concern."

Even without cleavers, Mr Venkata­krishnan's latest job is no less daunting. AngloGold is the world's third-largest gold miner, with projects spanning the globe from Colorado via Colombia to Australia. In its home, South Africa, its mines stretch up to 4km underground, warrens of shafts and tunnels that are among the world's toughest workplaces. Above ground, the social and political conditions are similarly labyrinthine. After expensive investments, the miner's balance sheet is under strain.

"Mining is not a business for the faint-hearted. It comes with numerous challenges," says Mr Venkatakrishnan. "[But] the impact you have when you take decisions for the long term is phenomenal."

We are in a small Indian restaurant in a Johannesburg shopping centre. Mr Venkatakrishnan's home is in the nearby suburb where Nelson Mandela lived, but the mall's other draw for Mr Venkatakrishnan, a Tamil Hindu who was born and brought up in Chennai, is its cinema showing Bollywood movies. Mr Venkatakrishnan says it is hard to go more than a few days without Indian food. He is vegetarian, which adds seasoning to his Smithfield market experience.

Tracing a line from Chennai to Johannesburg is not straightforward. Many miners have a buccaneering reputation. Mr Venkatakrishnan followed his father and grandfather into accounting and at his church school led the road safety patrol. But his career shows more relish for novelty and adventure, and getting his hands dirty, than the label "third-generation auditor" might suggest.

"It has never bothered me that you are going into a new situation . . . typically jobs have attracted me that way," he says.

At Deloitte he learnt dispassionate crisis management. "Typically these things come in on a Friday evening and they want a solution on Monday morning," he says. "You are ultimately there to generate cash and maximise value. It has got to be unemotional [but if] you don't handle it properly you . . . lose out in maximising value."

He stepped into mining directly from Deloitte, when it was helping to restructure Ashanti Goldfields, the Ghana-based gold miner that was the first African company listed on the New York Stock Exchange. Spotted by Sam Jonah, Ashanti's CEO, as the company lab­oured to unwind a misconceived hedging strategy, Mr Venkata­krishnan became finance director and stayed four years in Ghana, commuting back to his London-based family.

After Ashanti merged with AngloGold in 2004, Mr Venkatakrishnan, known in the industry simply as Venkat, spent a near decade as chief financial officer of the enlarged company. But with no mining background, he admits to hesitating before stepping up in 2013 to succeed Mark Cutifani in the top job at AngloGold, unsure of whether he would get backing from experienced operating colleagues.

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There is much to do. The gold sector is under more stress than at any time in the past decade. The price of the precious metal went into sharp reverse in 2013, leaving companies including AngloGold with a collapsing share price and ominous amounts of debt.

Last year Mr Venkatakrishnan had to perform an abrupt U-turn on a proposal to split AngloGold in two, with its assets outside South Africa spun off into a London-listed company. Shareholders balk­ed at the $2bn rights issue AngloGold said was necessary to enact the transaction and the plan was shelved just days after being made public. Now the company has put a large mine in the US up for sale to try to pay down debt.

Many things could have been done differently, Mr Venkatakrishnan says now. "There were a number of learning experiences in this process . . . [but] we were not cowards. We took it head-on."

Asked to describe his style, Mr Venkata­krishnan says he thinks of himself as someone who can pull a team of experts together. "I have held the principle where you employ the best person for the job and they are likely to be more capable than you in their respective field . . . If you surround yourself with a bunch of yes-men or yes-women it is a disaster waiting to happen," he says.

"We have a very good team that openly expresses its views . . . You take everyone's views into account and then you make a call."

The longer-term challenge for AngloGold is to improve productivity in its ageing South African mines. The country, labouring under power shortages and riven by industrial disputes, is all but written off by some investors. Mr Venkatakrishnan denies that the shelved break-up was about walking away from South Africa.

"Those challenges are there. But it doesn't mean you are getting to a point where you say 'This is not going to be sustainable in the long term'. We are not in that camp," he says.

A problem for the country's mines, he says, is that "people are fighting about a pie that is shrinking. There is not enough effort going into thinking about how to make the pie bigger" - that is, increasing the profits that mining generates. He has encouraged more town hall-style meetings with workers - many of whom are migrants - to try to foster a common attitude.

He also says South Africa needs to improve education and has started a personal university bursary for five disadvantaged students from areas connected with AngloGold's mines. Meeting them, he says he could "see the absolute fire in their belly . . .[they] have progressed every step of the way".

Mr Venkatakrishnan says he remains religious, attending church and his templeand praying for his 60,000 employees. He visits any injured mine workers hospitalised in Johannesburg, and says the "human element" is still critical in any decision.

"It is not that you are dealing with numbers, you are dealing with physical people," he says. "You can be tough and hard but you can also make the correct socially responsible call."

Second opinion: 'We need this guy'

Sam Jonah was chief executive of Ashanti Goldfields when "Venkat" arrived on assignment with Deloitte.

"Everyone loved him in the organisation," says Mr Jonah. "There was overwhelming endorsement among the finance and auditing staff . . . they said they needed this guy."

He adds: "One of the enduring qualities is that Venkat would always come to you with a solution to a problem, rather than just bringing you the problem."

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