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The Maran line in right - The Financial Express

Editorial ()
17 September 1997

Title: The Maran line in right
Author: Editorial
Publication: The Financial Express
Date: September 17, 1997

If news reports quoting industry minister Murasoli Maran in New York are
correct, the ICI bid to enter Asian Paints through a nine per cent stake is
likely to face a rough ride at the Foreign Investment Promotion Board.
This is as it should be. The fact is ICI in trying to gatecrash into
India's best paints company without a by-your-leave from the promoters. The
residual promoters-after the exit of Atul Choksey-have made it quite clear
that they don't want ICI and have repeatedly emphasised that they have
nothing to gain from the alliance. If, after all this, ICI hasn't got the
message, it is perhaps right for Maran to tell them the same when the
matter comes up before the FIPB. Attempts have been made to paint the
promoters' opposition to ICI as a xenophobic reaction to foreigners, that
they will not be able to do as well as Choksey in running the company, and
that ICI will somehow bring new value to the paints business. All this is
humbug. Protecting the paternity of successful Indian companies is going
to be important to the future of India's globalisation thrust. How can
India hope to build a global presence in any sphere when the only companies
capable of doing so are gobbled up before they even attempt to do so? Seen
in this light, the opposition to ICI's entry in Asian Paints is not a case
of xenophobia-not at least when barriers have been erected to external
takeovers in several developed countries. As for the second objection, that
Asian Paints without Choksey could be a rudderless ship, it makes even less
sense. It fails to differentiate between owners and company managers. If
the Danis, Vakils and Choksis are not good managers, they can let
professionals run the show-and the company should do fine. It is
ridiculous to think that owners need to be successful managers. The third
argument, that ICI can somehow add value, is the silliest of them all. All
these years, ICI has not been able to add value even to its own subsidiary
ICI India. Asian Paints has taken the pants off the company in the
marketplace. So where is the question of ICI plc adding value-at least of
the kind of value that cannot be secured through technology tieups and
other joint ventures? Maran is right to see the ICI entry into Asian Paints
as an intrusive presence that cannot do either the country or the company
much good. Rather, such uninvited guests damage the cause of foreign
investment in India. It's a pity, Maran is not able to sell his sensible
line to finance minister Chidambaram in the legitimate defence of Indian
industry's interests.


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