It was not just another birthday for Jet Airways’ promoter Naresh Goyal this year. On July 29, Goyal turned 63 and got the perfect birthday gift — worth over Rs 2,000 crore. For it was on this day that Jet’s proposal to sell a 24 per cent stake to Etihad cleared the final hurdle, with the Foreign Investment Promotion Board okaying the proposal, which seemed to be hanging fire for some time.
Always a Chettiar
At the Annual General Meeting of E.I.D-Parry of the Murugappa Group, a shareholder wondered how the promoters, belonging to the Chettiar community that is known for frugality, allowed the debt to mount to high levels. Unfazed, the chairman, A. Vellayan, explained that the company had taken a conscious decision to expand rapidly across South India because the time was ripe for the sugar business to grow. Over the next two-three years the liabilities would come down and the situation would be corrected. Then the shareholders would understand that he “is still a Chettiar at heart,” he assured the shareholder.
Annual general meetings can throw up their funny moments. At the AGM of Jay Shree Tea, a shareholder found it fit to complain about the monsoons and the timing of the meeting. The shareholder’s biggest grouse was why the AGM always coincided with heavy showers in the city. The surprised MD could only say: “I can assure you sir, I don’t plan the rains. Nor do I have a hand in it.”
Give a gift or else…
At the same AGM, it was the turn of another shareholder to object to all resolutions of the Board — be it appointment of a Board member or extension of terms — to make his point. Even an increased dividend payout was objected to. When the CFO asked why he was complaining about an increased dividend payout, the shareholder replied: “First give us a gift or announce at least 500 gm of free tea packets. Only then will I withdraw my objections.” Quite a forceful objection, indeed!
With reservations
In the wake of the recent order of the Central Information Commission bringing political parties under the ambit of the Right to Information Act, RTI enthusiasts have started rushing to political party offices with applications for information. The Communist Party of India had to deal recently with one such application. The applicant wanted the names and addresses of the members of the party. CPI has about 6.5 lakh members in about 60,000 units. “We will have to spend lakhs of rupees if we decide to accept that RTI query,” says CPI’s general secretary S Sudhakar Reddy, justifying his party’s decision to oppose the CIC order. Moreover, he says, the CPI does not maintain records of its membership from district level onwards. “That’s a policy we had adopted after the Emergency days,” Reddy adds. The party is open to disclosing the financial details, but not the intra-party discussions and such organisational matters.
Slowdown blues
There was a time when delivery of a brand of SUV from a Bangalore-based auto maker would have taken at least six months. Journalists would be politely told not to send their requests to get the vehicle for their relatives or friends delivered much ahead of time. In fact, a dealer for the company once revealed that the long “waiting” time was good for the company’s image. But with the auto industry reeling under recession, the same brand of vehicle is delivered as fast as possible to prevent customers from booking a competitor’s vehicle.
US of A(ndhra Pradesh)?
In the 1980s, the jocular expansion for USA was Ulhasnagar Sindhi Association. But it is quite a while since one heard that being used. These days when everything in Andhra Pradesh centres around Telangana, raising mixed feelings in the State, one of those against the division of the State felt that instead of referring to the divided regions as Andhra and Telangana why not call it USA — United States of Andhra Pradesh. This would retain the local flavour and even make every district a State if need be. Any takers?
Free handsets! What next?
For once, even the normally unflappable Finance Minister was caught on the back foot. At a recent press conference in the nation’s capital, P. Chidambaram was asked by more than one reporter, in Hindi, if the Government planned to give mobile handsets to the masses, as part of its attempts to ensure that the subsidy benefits reached the beneficiaries. A stunned Chidambaram wondered where such ideas originated. After quickly consulting his colleagues on the dais, Chidambaram, replying in Hindi, to everyone’s surprise, said that even if the Government handed out mobiles, the recipients would have to foot the bill. Clearly, Chidambaram is in no mood to spend. Remember, the red line on fiscal deficit has been drawn at 4.8 per cent of GDP this fiscal.
Food for thought
Politicians may have different views on the definition of poverty and how much a square meal would cost. Some believe that one can get a square meal for just Rs 20 in Delhi and Mumbai. It was left to the Chief Financial Officer of a food processing company to put things in perspective. If the politicians’ assessment is correct, then the salaries of members of Parliament and legislative assemblies should be cut by 80 per cent, he said. Will the political class agree?
Managing risk
That risk management and oversight are important in banking, be it when lending or investing, cannot be over-emphasised. A North-based public sector bank learnt this lesson the hard way last Thursday when one of its fixed income dealers punched in a quote of 7.25 per cent for lending Rs 1,900 crore in the call money market instead of for borrowing. Seeing this as a godsend when the going money market rate was about 10 per cent, banks merrily accepted the offer. Realising the grave mistake, the bank pressed the panic button, escalating the matter to the central bank. Luckily for the bank, the counterparty banks obliged by reversing the transactions due to the freak trade. Banks should put in place adequate checks and balances, get experienced staff to handle dealing operations and adequately train newbies to avoid such incidents.