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It must be heartbreaking for tycoons to see their investments falling into the hands of their bankers. But this is precisely what is happeni...

Written by Dilip Cherian

May 12, 2003 12:00 AM IST

4 min read

It must be heartbreaking for tycoons to see their investments falling into the hands of their bankers. But this is precisely what is happening to several of them. The latest to bite the dust are the tycoon duo of N.P. Garodia and Rajiv Modi. Clearly, these were two gentlemen who believed that they could get away with avoiding payments altogether. Surely nothing else can explain why since 2000 no payments were made, despite huge dues mounting up. While there must be no shortage of advisers, both within the financial institution itself and specialist consultants outside, who must have assured them that nothing was going to happen, the date of reckoning arrived pretty soon. Now that Garodia and Modi are out of their tycoon status, at least as far as, in this unit is concerned, it is going to be worth watching what happens next. The products, which include cotton, silk, dyes and polyester fabrics, that the company has been making, are fortunately competitive and so it is likely that there will be no shortage of bidders for this rather conveniently located unit. Cracking down on defaulters is, clearly the mood of the moment as far as institutions are concerned and it must sadden these tycoons that they were early victims of a process that is still going to get many more scalps, in this part of the world.

Time is running out

The Sheths who run Great Eastern Shipping Company, in an uncharacteristic move gave an ultimatum to the government. They are saying that if tonnage tax is not introduced soon, then they will flag out. Managing Director, B.K. Sheth has been demanding an introduction of the tonnage tax for a long time. But there has been no response from the government. Tonnage tax, Sheth insists, is the only way they can be on an equal footing with other global shipping companies. The shipping magnates have incidentally already refused to take part in the SCI Shipping Corporation of India8217;s divestment plan. They felt that the slow disinvestment process would lead to a loss in the tanker department as other global opportunities would be put on hold for too long. GE Shipping is in no mood to lie back and wait indefinitely, until the government decides to react and get the tonnage tax in place. The Finance Minister has already set up a committee to look into the matter but like all other committees they suspect that this one will take forever to come out with a decision. That is perhaps one reason why the usually, out of sight and at-sea-level visibility-preferring Sheths are now in a threatening mood. The other could be that this quarter the Sheth8217;s flagship company has reported a whopping 285 yes thats right! increase in profits. Now you know how macho tycoons get when the money is rolling in.

Tailpiece

Why did Nusli Wadia bump Sunil Alagh off the biscuit trail is the question that corporate tycoons are trying to figure out still. The big boys in the business believe that Corporate management and quarrels over issues had little to do with it. And as for those who were betting that Alagh would just move down the road to grace Mallya8217;s stable of Corporate stallions, they too are keeping their fingers crossed. Alagh8217;s next move may well be to Mumbai, though that8217;s not his favourite stomping ground. But then these days, Bangalore seems a bit over crowded with, out-of-work CEO8217;s and local tycoons aren8217;t exactly scrambling to get them.

Dilip Cherian, runs a public affairs firm Perfect Relations. He is an economy watcher and tycoon tracker. None of the people he writes about are his clients. Your insider tales are welcome at dilipcheriannow-india.net.in

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