Sucheta Dalal :Chalo Delhi (19 January 2003)
Sucheta Dalal

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Chalo Delhi (19 January 2003)  

In the early 1990s when brokers of the BSE made frequent trips to Delhi to lobby against Sebi’s attempts to discipline them, the then Sebi chairman G.V. Ramakrishna had famously quipped: for the BSE, the shortest route to Nariman Point (where Sebi’s office is located in Mumbai) is via Delhi’.

Ten years later, a new Sebi chairman seems to have turned this on its head. These days Sebi is so caught up with impressing Delhi that major events are organised there to ensure the attendance of various ministers. Here is what we mean.

On January 16, the Finance Minister launched retail trading in gilt edged securities in Delhi. But retail investors are concentrated mainly in Maharashtra and Gujarat, and the two regulators RBI and Sebi are also based in Mumbai, so are the two national exchanges and depositories who will enable the trading as also the biggest debt market brokers.

On January 17, the Prime Minister kicked off a national investor awareness programme in Delhi—the same applies. At the end of the month, Sebi will hold a major conclave for Foreign Institutional Investors—again at Delhi. So focussed is Sebi on Delhi that even its choice of new executive directors is rumoured to have been dictated by Delhi—though not necessarily by North Block.

Shedding costs

Having cut costs and improved processes until it has reached the stage of having to sacrifice quality, the mighty Hindustan Lever (HLL) is probably realising that the only cost left to cut is its high wage bill.

Sources close to the company say that a few hundred senior managers may be shown the door. Last October HLL said that it ‘categorically’ denies any plans to retrench/remove/retire senior executives. Its written statement however added that it reviews each manager’s performance and future growth potential within HLL.

And that some managers, based on the appraisal, do opt out of the company and ‘become part of the talent pool available to the Indian Corporate Sector’. Leading head-hunters say that the process is not so benevolent.

Managers have even been asked to go if they are ‘blocking’ the growth prospects of bright juniors. In effect, HLL allows only the fittest to survive. Given how high the salaries of HLL’s top executives have soared, there is nothing wrong with this strategy.

With the company facing increasing competition from smaller companies with lower costs and overheads, it has little choice but to cut its wage bill in order to reduce costs and protect profits.

Not just Mahajan

Pramod Mahajan is clearly not the only politician to have used public sector undertakings (in his case MTNL) to bail out the beleaguered, dead-end projects in his home State (irrigation companies in Maharashtra).

The powerful CEO of Andhra Pradesh is also trying to lean on an oil company, but for good social causes. The good babu, says a Delhi insider, wants HPCL to set up 16,000 midday meal kitchens in Andhra Pradesh.

The cost? Approximately Rs 150 crore. The HPCL board is apparently in a quandary even though the request is not from the Petroleum Minister but just a coalition partner. In the past, ONGC had coughed Rs 85 crore to build a bridge in a Lok Sabha Speaker’s constituency.

Is it any wonder then that the ruling party, all its coalition partners and the entire squabbling opposition is united on the issue of blocking PSU disinvestment?

Looking back

Two corporate rivals that have fought a hard and bitter battle for a bigger slice of public mind share as India’s better-managed and dynamic companies have both decided to look back and recall their history.

ICICI Bank, which recently buried the older ICICI, has commissioned Sharada Dwivedi—co-author of ‘Bombay-the cities within’ and the sister of its managing director Lalita Gupta to write the 50-year history of the development financial institution.

At the same time, HDFC is collaborating with the Forum of Fre Enterprise to produce a biography of the visionary H.T .Parekh. Will the two books also fight for production values and shelf space?

Tailpiece: The Birla counter offer for Larsen & Toubro’s demerged cement unit is headed into the arms of an independent valuer appointed by the institutional investors.

Maybe the valuer would ponder over the incongruity of the Birla claim that Larsen & Toubro’s cement assets be priced at $51 a tonne, while they want $95 per tonne for Mangalam Cement despite its locational disadvantage.

-- Sucheta Dalal