HVK Archives: The East India Company lives
The East India Company lives - The Sunday Observer
Jay Dubashi
()
24-30 August 1997
Title: The East India Company lives
Author: Jay Dubashi
Publication: The Sunday Observer
Date: August 24-30, 1997
One by one, Indian companies are failing into the laps of eager foreigners.
The first to go was Ramesh Chauhan's Parle and I haven't touched a soft
drink since.
The second was Tata's TOMCO, which was grabbed by Hindustan Lever. Lakme
has also met the same fate, or is going to. So is Premier Automobiles
which is selling bits of its company to foreign car manufacturers, and will
have little left at the end of the day.
Now comes the news that Asian Paints may also go the same way. Asian
Paints is not an ordinary company. It is one of the best managed firms in
the country and entirely swadeshi. Four families got together way back in
1942 to set up a small firm which has now grown into a giant with strong
presence in as many as seven countries.
One fine morning well, not so fine - one hears that one of the families has
decided to get out and is trying to flog its shares in the share market.
The shareholders have not been told why such a thing should happen all of a
sudden. Within days, there are reports that the managing director of the
company is trying to sell off his stake to two foreign institutions, but,
for some reason, the deals fell through.
All the time, the MD tells the press that there is no question of his
selling his stake to multinationals. But within. hours, he sells his
shares to a business rival, a foreign company, which used to be known,
appropriately enough, as Imperial Chemical Industries. It is apparently
still very imperial and after purchasing the shares says haughtily that it
is only biding its time to take over Asian Paints lock, stock and barrel.
This is what the papers say. The truth is something different. It turns
out that Atul Choksey, the managing director, was in touch with ICI for a
long time and actually made a trip to London to meet them. This was only
two months ago, by which time his plans for getting out of his company must
have been well advanced.
ICI did not bite then, but they were certainly in the. picture. They knew
that the MD was looking for buyers for his shares, though he kept insisting
that he would not deal with multinationals. No company could be more
multinational than ICI.
Incidentally, all the actors, in the drama are Indians. The chairman of ICI
in India is an Indian who, until recently, was a director on the board of
Unilever in London. Before that, he was chairman of Hindustan Lever in Bombay.
The financial institutions, though foreign, had their Indian agents. It is
these Indian agents that put through the deal and made a lot of money in
the bargain.
What worries me in this shoddy affair is the total lack of transparency at
all levels. Atul Choksey, who has been hyped by the media as the engine
behind Asian Paints, knew all along what he was going to do. So did
everybody else. But they all acted in a clandestine manner in favour of a
foreign company.
They probably took their cue from our own ministers at the Centre. While,
for instance, Finance Minister p Chidambaram keeps denying that he has any
intention of allowing foreign insurance companies into the country, the
signals he sends them are entirely different. He says something in
Parliament and something else to insurance company bosses. Either the
government has not made up its mind or the ministers are not speaking the
truth.
Another minister, Murasoli Maran, who looks after industry, told an
audience in Manchester that the insurance sector would be opened up to
foreign companies in due course. This is not what his colleague, P
Chidambaram, told Parliament. Why this lack of transparency? Whom is the
government trying to hoodwink?
The Asian Paints affair leaves a very bad taste in the mouth. One does not
expect captains of industry to behave like this. Asian Paints is not ]like
Premier Automobiles. It is not going down a hole. It is a healthy
company, a company that has built itself up by its own bootstraps, like
Nirma. But it is obviously a victim of internal sabotage, planned and
executed by its own henchmen.
I do not blame ICI for jumping into the fray and grabbing a slice of the
goodies. It did what the East India Company did two centuries ago. But I
had 'thought that there were no Mir Jaffars in India any more, not while
the country was celebrating the golden jubilee of its independence. Are we
really a free country?
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