The war between the Ambani siblings seems to be getting more intense rather than settling down. The discussions have certainly moved forward, and there is a general expectation that Anil Ambani will take Reliance Infocomm, but there is no sign of an actual handover. Instead, things have just got dirtier. First there is that letter to the Prime Minister from Parliamentarian Vijay Singh Yadav questioning the motives of several media outlets and accusing them of supporting one brother. Meanwhile, IPCL is still pursuing a business channel’s “false” report that it was to be merged with Reliance Industries. It has again written to the Securities and Exchange Board of India (SEBI) demanding an investigation. Doesn’t this suggest that the older Ambani and his friends were getting ready to avenge the damage they had suffered? That effort has been struck a severe blow by Anil Ambani’s allegation that his phones have been tapped at the instructions of Reliance Infocomm directors, who are close buddies of brother Mukesh. While this is happening, Reliance Infocomm’s services are going from bad to worse. Almost a million subscribers have been dropped, complaints are mounting and its top company executives do not respond anymore to customer complaints. Many subscribers, including corporate buyers, are planning to turn in their phones but are stuck due to a penalty clause. If the situation gets worse, Reliance’s phone customers will soon be praying for a settlement or demanding their money back. On another front, sources say a leading accounting firm, Price Waterhouse, wants to exit from the joint audit of Reliance Energy and effort is on to rope in Ernst & Young.
BOB’s customer salvo
New private banks, jostling for business in the market place, have long realised that technology and flawless service are the biggest magnets for customer acquisition. And nationalised banks are usually their favourite hunting ground. But Bank of Baroda (BoB) Chairman Dr. Anil Khandelwal is determined to stop this drain by putting the consumer at the very top of his priority list. He has backed this up with a circular to employees that ‘any misbehaviour with customers will be treated on par with financial fraud’. That’s not all. The chairman is determined to demonstrate that the buck stops right at the top, so complaint-handling will report directly to him. This is exactly how it is with the better private banks. In BoB’s case, the chairman is putting in place a toll-free number on which its depositors and customers can directly access a small, five-member call centre, which will report directly to the head office. This will be in addition to the regular complaint mechanism mandated by the Reserve Bank of India.
Indians take great pride in the global achievements of their countrymen and our media also loves to magnify every triumph and success. Last week, however, saw a spate of bad news from global achievers or their Indian connections. Investment Guru Warren Buffet has been the biggest shocker. Wall Street Journal reports that Buffet, “in a bid to win leniency for Berkshire from prosecutors” directed his lawyers to hand over documents describing a suspect transaction between a Berkshire unit and AIG to the regulators. The scrutiny that followed led to the exit of Hank Greenberg, Chairman of AIG, one of the world’s biggest insurance companies. Some say that Buffet has erred badly in supporting his trusted lieutenant Ajit Jain who had written some controversial insurance policies that were substantively a loan used by borrowers to misstate their financial condition. Meanwhile, like the hyperbolic BRIC report, Goldman Sachs’ controversial prediction that oil would spike to $105 a barrel was also made by an Indian — Arjun Murti. Another Indian under a cloud is Victor Menezes, former head of emerging markets at Citigroup. Menezes has received a notice from the US Securities Exchange Commission that he may face an insider-trading suit connected with a block of shares worth under $30 million he sold in 2002, just before the release of an earnings report listing its losses in Argentina. Although Menezes has since retired, Citigroup has defended him and said he also bought shares and hiked his total holding.
Long way to go
Goldman Sach’s BRIC report and cumulative FII of $30 billion into India often tend to delude us about global interest in India. We also tend to believe that FII investment is very savvy, based on hard-nosed research and data crunching by highly-paid analysts. An Internet advertisement by US Global Investors Inc should blow both suppositions. The $1.8 billion fund says in a CBS Marketwatch newsletter, “Eighty per cent of the world lives in emerging-market countries — ninety percent of Indians have never seen a telephone”. This fund, like many others around the world, boasts an Indian on its top payroll.