At the posh Woodlands Hospital in the Calcutta's Alipore district, the sprawling room Number 101 used to be booked for months on end for one patient - five star hotels would have referred to him as a "long staying guest". The hospital was virtually second home to Arun Kumar Bajoria - trader, jute mill owner and the new saviour of Indian minority investors. Bajoria's hospitalisation, say sources, was part of the standard technique of those facing arrest by Indian regulatory authorities. His list of problems include an enforcement investigation with regard to foreign accounts, another by the same department with regard to the Swiss bank account of a media baron; and an arrest for default on Provident Fund payment to the employees of two of his jute mill companies.He is a veteran of income tax raids and an inveterate trader and moneylender. Curiously, his dabble in big stake investments is neither new nor always successful. He had once purchased a big lot of shares of Jaiprakash Industries in 1994 during the Income Tax investigations into Harshad Mehta's benami shares. Later he picked up a 27 per cent stake in Agritech Hatcheries, belonging to the flamboyant Parvez Damania. According to market sources, he continues to hold Agritech stock even when the company went steadily into the red. At one time he offered to bail out a high profile liquor baron, was flown to Bangalore to seal the deal, but apparently backed out.It is an irony of our system that the same Bajoria, now fit and voluble is strutting the front pages of newspapers with his crude hectoring of Nusli Wadia (he insists on referring to Wadia as "Jinnah's grandson" and claims that it is because more Indians are familiar with the name of Jinnah than Wadia). Clearly, Bajoria's high decibel campaign is aimed at attracting attention and he is doing it very successfully. The question is why?If he was aiming at merely rattling Wadia, then he has succeeded. Why else would Ratan Tata and Keshub Mahindra run to the SEBI chairman to lobby for Bombay Dyeing? With a 40 per cent stake and plenty of spare cash with which to launch a counter bid or a buy-back offer, Wadia apparently has nothing to worry about. But maybe Bajoria knows more than we do. The other explanation for Bajoria's aggression is possibly to ensure that his open demand for greenmail (``I am ready to sell to anyone at Rs 200'') succeeds. He probably reckons that more aggressive he is, the faster will Bombay Dyeing want to bury the issue. Media reports already suggest that Wadia's emissaries are negotiating with the man.What would be of interest is to see what happens if Bombay Dyeing ignores Bajoria and waits it out. If, as the Bajoria camp says the entire 14 per cent acquisition is funded through owned funds and vyaj badla financing, then eachday that he holds the shares costs him a lot of money. He will also be forced to make an open offer and that could call his bluff. Experienced market sources say that Bajoria is unlikely to gamble so big unless a heavyweight financier was backing him. And this is what could worry Wadia. Given their history, the finger naturally points to the Ambanis, but they have issued a statement denying any interest in Bombay Dyeing.Bajoria's game will unfold or come unstuck in the next few weeks, while it does, the irony is that minority investors are bound to be grateful to him for shaking up at least one company and giving life to their shareholding. The really smart ones will control their greed and get out when prices are high. Others could get stuck if Bajoria strikes a quiet deal with Wadia and makes an exit.It would have been nice if our first predator had a better corporate track record, or if he had, like the famous T.Boone Pickens Jr., at least pretended to rattle complacent management in the interest of minority shareholders. But it does not matter. We still need our predators. Moreover not all predators who have launched hostile bids in the last few weeks are in the same genre as Bajoria.Gesco Corporation is an excellent example. The predator AH Dalmia knows the real estate business which is the prime business of Gesco. Moreover, four families control Gesco, and their combined holding is a mere 13 per cent. This means that Dalmia with over 5 per cent already has a better right to a say in the management of the company. A huge public holding of 52 per cent gives both Dalmia and the promoter families an even chance of wresting control. While the existing management may launch a big counter bid, the need of the hour is to see that Gesco is not badly stripped of funds in order to keep the existing promoters in the saddle.Indian companies have been impervious to investor interests for far too long. Our peculiar corporate structures have allowed single families to build business empires entirely built on money borrowed from public financial institutions and nationalised banks and directly from individual investors. They have treated these assets as their private wealth and steadily bled the companies until they turned irreversibly sick.Ironically, the promoters of sick companies such as Nirlon, Mafatlal and a host of others have continued to make news with their obscenely lavish weddings and parties even as they block any efforts at rehabilitation or takeover of their companies. The Thapars of JCT and the Muthiahs of SPIC are other examples which have turned sick due to diversion of funds. The new management of some companies which were part of distress sales in recent times, confirm that the relentless siphoning of money by the promoters had run these companies to the ground. Promoters usually bleed companies through high-priced transport contracts, demand cash kick-backs on all purchases, indulged in massive under-invoicing and vice versa in export-import deals and additionally get the company to pay for luxuries such as imported cars, parties, foreign travel and aircraft. Political connections and politically affiliated trade unions take care of regulatory agencies as well as the workforce.It is only the threat of hostile takeovers displacing promoters from management and taking away their golden goose, which will force corporate India to turn professional in their management policies and look after investor interests.Author's email: suchetadalal@yahoo.com- Sucheta Dalal
