Thursday, June 29, 2006

Fighting in the battlefield –from Delhi to Luxembourg

For the last few days all eyes in the business sector in India were riveted to the news of takeover of one of them by the other. For once, people thought of having a giant Indian corporate house to take on the global challenge, for a short duration we thought of playing global and challenging some global corporate in that field. But, alas that was not to be. It turned out to be a bohemian flirting rather than any long term relationship. It became the story of an affair going sour before marriage. It once again became a story of a failed Indian saga.
Yes, I am talking about the much publicized Jet and Sahara deal which was cancelled in bizarre circumstances under unknown pretexts. This is not the right forum to talk about such matters, neither I am competent to analyze such a big deal in business. But what I felt at the falling of the deal is not something economic or business related. It was purely a feeling of a pain, a pain of unfulfilled promise, a pain of being unprofessional in a professional world. Its not first time in history that an acquisition has been cancelled at the last moment, neither is it the first case of an attempted takeover going awfully wrong. But what was wrong was the approach, the faulty valuation and moreover the mudslinging which continued (and still continues) after the deal turned backward. This once again showed the darkness of our system, the immaturity within our business as well as our political class and at the same time the unprofessional approach of some of our best brains in the respective field.

The Sahara airlines takeover, valued at Rs.2300 Crore was initially Okayed for acquisition by the Jet board of directors (read Mr. Naresh Goyel) and was duly notified by both the companies. Then the normal process of takeover started. Jet even went to the extent of overseeing day to day activities of Sahara and started giving change over training to erstwhile Sahara employees. Suddenly came the spanner in the spoke. Jet asked for revaluation of the airlines which Sahara rejected and the whole episode became tipsy turvy. Litigations, counter accusations, political pressures and legal proceedings followed one after another with stupendous indignity, and media coverage made the whole affair a public maasala rather than any business news. It then followed the same path as of the famous Ambani brother feud which only resulted in bad publicity and showed immaturity on their part. Events did not stop here. Tug of war started for the money deposited in the escrow account (Rs.1500 crore). The political clout followed and nothing was left to imagination.

The whole episode not only marginalized the goodwill of both the companies, it also showed how under prepared we are in business. We don’t have any business ethics and neither do we follow any business logic. We don’t have any long term strategy or vision to grow – be it business or be it politics. In the whole episode Jet got away scot-free due to its big brother status and Sahara was left in the lurch to fend almost a sure death (Sahara airlines has to pump in Rs.1200 crore for survival). A slow but untimely death (if and when happens) for Sahara would probably mean monopoly for the other. Sahara on its part was guilty of not evaluating Jet’s offers properly; they went into the deal hastily and paid the price. Now, there is nothing left in the wings of the Indian aviation. A booming industry with immature players showed how even with liberalization, we would not be a super power. This much was for an acquisition which went almost through.

But, in these gloomy days there was another battle being fought by another Indian. Another story of fierce board room discussions, competitive bidding and confident stride of a person, who, on his own has showed the world how to do business and how to turn around a sick plant. Year after year, through innumerable takeovers L N Mittal has showed his resilience and wisdom of doing business and his latest takeover of Arcelor is the latest feather in the cap. The whole thing started way back last year and after much deliberation, laws and discussions by the EU, it was decided to be allowed. Then came the crunch moment. Mittal approached the board of Arcelor with his new but elegant master stroke. He presented a mixed cash n share deal for Arcelor with higher than expected share price for existing shareholders. The result – the deal created the largest steel behemoth, 3 times larger than nearest competitor. There were some concessions made by Mr. Mittal himself in order to see the deal through, but he maintained a rationale attitude and gave preference to business logic rather than any silly market suggesstions.

The difference between these two stories has been the business acumen, the resilience of the concerned person(s) and also the maturity of the board of directors. This showed we are still way behind in the race of building a nation which can feed itself on its own, both politically and economically.


Sunday, June 04, 2006

India and Indians...

I was really confused and questioned myself before starting off this blog. But I appreciate those who asked me to touch few finer points on the reservation issue. Hence I have decided that I will write about a broader perspective and try to fit in the reservation issue in that context without trivializing its importance.
I start off with asking some basic and fundamental question that is staring our generation for quite some time. Its time that we start introspection and stop avoiding our responsibilities. We should ask ourselves – are we sincere enough to contribute in building our country? Are we concerned about anything other than our own career and life? Are we so much a confused generation that we dare not ever put a mirror in front of us so that we don’t have to face our selves?
I guess all the above answers are known to us. It’s a syndrome which is visible across India. We are ready to curse everybody, we are ready to support from the wings, we are even ready to sponsor the crusade against reservation but we cannot be a part of the protest. We want all facilities at our doorstep but don’t want to bear the responsibility. We want latest knowledge, latest technology and what not!! But never ever we have realized that we also have some responsibility towards the society, something to be given in return for our country and society. We are vehemently opposing any cut in the existing seats in higher education as it would cut into our privileges. But never had we looked back at our country and society where we live in. Never have we questioned ourselves, never have we fulfilled our responsibilities.
It’s said that learned and literate citizens are the backbone of any country. Are we so? Responsibility does not end at paying taxes on time, it only starts there. We need to contribute in every possible ways to develop our nation. India is not only about IT and ITES; it is not only about IITs, IIMs or AIIMS, it is not only about 3 or 4 metros, it does not start or end with one Mumbai or Bangalore. India is also a country where 35% people are below poverty line, where more than 50% population are illiterate and where even an IAS or IPS officer never shies away from asking for bribe or dowry and where qualified doctors take money to kill children (read girls) in mother’s womb.
Are we dedicated to our nation? There is still division within our country; we still believe economic strength determines the respect and where money decides social status. Is this what educated India should be? We prefer corporate jobs than teaching as it is a less paid job; we hate research as it is not glorified; doctors are more interested in private hospitals and private practice rather than actual service as that pays off more. We are all running behind money knowing very well that “money can buy everything” in our country. If this is true that what difference is there between us and the bunch of politicians who have passed the bill for reservation?
No doubt political system in India has lost its respect and glamour. Indian political parties never prefer any authority which can curb their power. They are power mongers and they therefore clash with the SC, the EC and even with the president to safeguard their vested interests. But are we also not doing the same?
Have we ever seen any protest against rapes (which by now have become like daily news bulletin), have we ever protested against female fetocide, have we ever vehemently opposed them who take and give dowry even after being so called elite and educated? We have not because we don’t believe in introspection, we don’t believe in correcting ourselves. We are much better off criticizing others but never take the pain to clean up the mess for our own country. We love our country but would die to go onsite (and if possible get a green card). Media does not cover these as they are neither money spinner nor attractive massala news. We love India but not the Indians.
As it is told in the famous Rang De Basanti film: “Koi desh mahan nehi hota hain, usse mahan banana parta hain”.
We need to change. We need an India where everyone has access to better education, where social respect is not determined by money or bank balance, where youth is ready to contribute to the building of the society. Same is the case with reservation. Let’s accept we have a problem in hand. Let’s realize that we need to do something for some sections of the society. They may be OBC or other castes. But they are Indians who are being denied the basic infrastructure. Let’s not play into the hands of politics. Let’s take our vote seriously. We need more primary schools, less child labour and an equitable and justified society to remove hatred amongst ourselves. Let’s unite to build an inclusive society and an India where the caste becomes irrelevant and where one fine day even the reservation would be inconsequential.
Probably on that day we would be able to justify our glorious past and the sacrifices made by our brave soldiers at the border to save us.