December 27, 1999

Backdoor to advice
Vajpayee has this nice trick of making private industrialists feel good by putting them on neatly packaged committees. An Ambani is balanced with a Wadia and a CII representative with one from Ficci and the non-controversial ones such as Narayan Murthy, Ratan Tata and Kumar Birla to make up the numbers. This time the PM has set up six more committees, each comprising of one or two industrialists. Having sent the message that the government has no respect for legitimate advisors such as the Disinvestment Commission, the BJP government wants private industrialists to believe that it takes them a lot more seriously. Last time, the industrialists diligently prepared reports for the PM's consideration, but not even 5 per cent of the recommendations were even discussed. Several industrialists are clueless about their committees and have been seeking help from the very same bureaucrats and thinkers who the government has cold-shouldered. This government it would seem, finds advice more palatable if it comes in through the backdoor and in the guise of suggestions from the private sector. Now that the bank unions have bust the pretensions of some of these private sector advisors, we need to see if the PM still thinks they have the best recommendations.

Sweet deal
The Rs 500-crore sale of Indiaworld Communications (not .com) may not be smelling as sweet anymore, but deal-maker DSP Merrill Lynch is laughing all the way to the bank - or in this case to its own money market Mutual Fund. It is learnt that Rajesh Jain has parked most of the money that he received from Satyam Infoway with DSP-Merrill's money market fund. The market is also agog with rumours about how much the Investment Bank earned on the deal. Some say that it is 1 per cent on Rs 499 crore paid immediately after the first leg of the sale was completed, others speculate that it is 5 per cent of the price. DSP insiders prefer to be mysterious but say ''it is much more than Rs 5 crore''. As for Satyam Infoway, which is coughing up the money and floating a second ADS issue to pay for its acquisition - its problems may be far from over. India's biggest newspaper group had sent a legal notice to Indiaworld asking it to stop using its reports. Rajesh Jain had then obtained a legal opinion which said that so long as he provided hyper-links to the reports and did not lift them, he could pick up the news. If that newspaper group does not test it out in court, some other newspaper is bound to do so. After all, it is difficult to imagine a court agreeing with the view that Indiaworld can be allowed to dispense with the cost of huge reporting teams. Watch this space for developments.

Spending it easier
After a low key launch, the sale of SBI's credit cards through a tie up with GE Capital have picked up real speed. In fact, market watchers believe that the existing hierarchy in the business is in for a change. Amex began its big pitch in India around the same time as SBI, but has yet to make serious headway. Also the future of co-branded cards is beginning to look bleak. Star TV which was to launch a co-branded card with ANZ Grindlays has postponed its launch several times. One reason maybe the fact that another bank-publication co-branding would mean great mileage for only one of the two parties.

Mamata and the others
Friday night during Parliament sessions is time for our elected representatives and their entourages to make their way home for the weekend. As one watched sundry MPs and ministers swagger through the Delhi airport, the impressive exception caught the eye. Railway Minister Mamata Banerjee complete with a green jhola full of files made her way to the economy class making no attempt to jump any queues or to attract attention. Remember, it is she who had asked the railways to get rid of an aircraft which had been purchased for the use of the minister and save a pile of money for the beleaguered ministry. Clearly, private sector industrialists who head loss making companies and the bosses at the sick steel behemoths, SAIL need to learn a few lessons from the minister.

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The author's e-mail address is: suchetadalal@yahoo.com

 

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