Indian Economy: News and Discussion

Haldilal

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Damn so if the company or the loan is big enough or it is a PSU the govt is forced to spend money to bail it out.
Ya'll Nibbiars yeah in order to keep the economy going. If a large firm's fails then it's has It's domino effect and then every thing start to fail. That's why it's said Too Big to Fail's.
 

Haldilal

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Ya'll Nibbiars just see the PMCB it's sold to the BharatPay an inexperience Financial firm's due to the lack of availability of contenders. Tha financial assets are already stretched. That's why needs patience and drigellience.
 

Haldilal

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Ya'll Nibbiars not always NPA are written off's with high discount's. THE Take Brij Bhushan Singal’s sons, Sanjay and Neeraj, who ran Bhushan Steel BSL and Bhushan Power and Steel BPSL separately. Both have lost around Rs 55,000 crore wealth. The two companies were part of the Reserve Bank of India’s RBI’s first list of 12 big defaulters that were sent to IBC after their debt became unmanageable. Tata Steel acquired BSL for Rs 35,200 crore in 2018 while JSW Steel took over BPSL for Rs 19,350 crore in March 2021. The siblings are being investigated for money laundering and fraud too. And in this case only 450 crores was written off's and thats even less than 1 percent's.
 

Haldilal

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Ya'll Nibbiars And here another Succesfull NPA Recovery.

The Essar Group has come a long way from its heydays in 2014/15 when it was among India’s top five business houses with revenues of Rs 2.1 lakh crore. Although high debt was one of the reasons for the downfall, the Ruias were also a bit unfortunate they often found themselves at the wrong end of economic cycles. The refinery missed the scarcity and growth era of India’s oil sector. Steel capacity expansion happened when global prices had started to crash. Power plans started when India was reeling under a power shortage, but by the time the plants were operational, the country had excess capacity. The group lost Algoma Steel in North America, EPC Constructions India and Essar Power Jharkhand. Just before Essar Steel went bankrupt, the group was under a debt of Rs 1.38 lakh crore.

Such huge debt is not surprising. The group, always ballistic about growth, invested as much as $18 billion between 2011 and 2017. It acquired Aegis BPO, refineries in Stanlow (UK) and Kenya, a mine in Minnesota, apart from the Algoma steel plant. In April 2010, the Ruias raised $1.3 billion by listing Essar Energy on the London Stock Exchange, only to delist in 2014 after value erosion.

Years before this, the Ruias had entered the telecom sector and even applied for building a refinery, in the mid-90s. Essar Telecom rolled out mobile services in Delhi, Punjab and UP (East) in 1995/96. In 2003, a joint venture with Hutchison Whampoa expanded operations across India. Vodafone acquired Hutchison’s stake in 2007. Essar retained its stake. Between 2011 and 2017, the Ruias sold the 33 per cent stake in Vodafone for Rs 22,350 crore, BPO unit Aegis for $910 million and Vadinar refinery and its captive power plant and port for $12.9 billion. This was not enough to clear Essar Steel debts. ArcelorMittal and Nippon Steel lapped up Essar Steel for Rs 42,000 crore.

In April-May this year, the Stanlow refinery got into financial troubles. The refinery, bought from Shell in 2011, had pending repayment of $500 million credit from Lloyds Bank raised against receivables. When the pandemic affected business and cash flow, the British lender stopped acting as Essar’s main banker. Essar secured $850 million from various sources to replace the earlier loan and access additional capital. It is among the biggest assets for the Ruias and generated $300 million EBITDA a year prior to the pandemic.

The group now owns Essar Oil UK, Essar Shipping, Essar Ports and Essar Power. The group claims $14 billion (Rs 1.03 lakh crore) annual revenues despite losing flagship businesses. It has 2,130 megawatt (MW) generation capacity across five plants. Essar Ports is India’s second-largest private port operator, behind Adani Ports, with 110 mtpa capacity at four terminals. It also has five trillion cubic feet recoverable gas reserves across three coal bed methane blocks and one shale block. Besides, it controls 1.7 billion barrels of oil equivalent of recoverable conventional resources. Essar Power recently announced plans to build 90 MW solar capacity in Madhya Pradesh.

In mining and metals, it is building a seven mtpa pellet plant in North America. It has iron ore reserves of 2.3 billion tonnes in North America, 77 million tonnes of coal reserves in North America and 72 million tonnes of coal reserves in Indonesia. Essar Shipping & Oilfields owns 12 vessels. And are the only Indian corporate to repay Rs 1.4 lakh crore loans in last three years to all financial stakeholders, who recovered over 100 percent from IBC sale of our assets, which have seen an additional investment of over Rs 50,000 crore by new owners.
 

Haldilal

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Ya'll Nibbiars The Fall of the ADAG.

Anil Ambani, the younger son of Dhirubhai Ambani, was known for living a luxurious life — appearing with celebrities, hobnobbing with top politicians and travelling on private jets. In 2007/08, when elder brother Mukesh Ambani gifted wife Nita a corporate jet worth Rs 250 crore, Anil bought a super luxury yacht for wife Tina for Rs 400 crore. That was then. In September 2020, appearing virtually before the High Court in London in a debt repayment case, he declared he owned no significant assets and his expenses were borne by wife Tina and his family. When the court asked him to declare personal assets and credit card details, he said he had sold all his jewellery to pay legal fees. He tried to convince the court that he leads a simple life, drives one car and owes money to his family. Earlier, in May 2020, the court had ruled in favour of the appellants three Chinese banks which had lent to RCom but Ambani failed to pay the $716 million that RCom had reportedly taken on the basis of his personal guarantee. The banks are trying to take possession of Ambani’s overseas assets. That is not all. State Bank of India (SBI) has also initiated personal bankruptcy proceedings against Anil Ambani. In August 2020, the Delhi High Court stayed the resolution process initiated in the NCLT. The Supreme Court later refused to vacate the stay. Ambani requested the Delhi High Court to include Chinese banks in his legal challenge to SBI’s proceedings in India.

The seeds of the crisis lie in the group’s debt-raising spree to build capital intensive projects in power, defence and infrastructure sectors. The group debt more than trebled from Rs 41,892 crore in March 2008 to Rs 1.61 lakh crore in March 2018. The once flagship telecom business, RCom, also heavily indebted, faced a major disruption when Mukesh Ambani’s Reliance Industries launched free voice and low-cost data services under the Jio brand in September 2016. RCom tried to sell some assets but defaulted on debt in 2019. It was taken to IBC. The shares, which had peaked at around Rs 800 in March 2006, fell below Rs 1 in 2019. Reliance Naval and Engineering also failed to service loans and filed for bankruptcy. Reliance Home Finance and Reliance Commercial Finance, subsidiaries of Reliance Capital, too, defaulted on loans. Banks started the debt resolution exercise for both companies as per the Reserve Bank of India’s June 7, 2019, circular on Prudential Framework for Resolution of Stressed Assets Directions 2019. These companies will get new owners soon. Cash-strapped Reliance Capital defaulted on term loans of HDFC Ltd and Axis Bank on October 31, 2020. Reliance Capital’s total debt was Rs 26,906 crore in March 2020.

The group has two more businesses, Reliance Power and Reliance Infrastructure. In mid-2020, Reliance Infrastructure declared a financial debt of Rs 17,065 crore. Reliance Power defaulted on repayments to Axis Bank, Yes Bank and Lakshmi Vilas Bank due on January 31, 2020. Its total borrowings stood at Rs 28,803 crore as on March 31, 2020. In October 2020, Yes Bank initiated steps to attach Reliance Centre, the Mumbai headquarters of the group. The group is among the biggest borrowers of Yes Bank with a loan of Rs 12,000 crore. The Enforcement Directorate (ED) had summoned Ambani in connection with the probe against Yes Bank founder Rana Kapoor in March 2020.

Ambani is making a last-ditch effort to be in the reckoning with the defence vertical. The ventures with Dassault Aviation and Thales of France are operational at Mihan, Maharashtra. The plan includes making components for Falcon 2000 jets and radars. A defence subsidiary, Reliance Armament, has submitted request for proposals for manufacturing light machine guns, sniper rifles and other small arms worth over Rs 6,000 crore. However, it has made little progress in showcasing these weapons and sending them for army trials.
 

Haldilal

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Ya'll Nibbiars The Biani's Flying out of India.

Braj Bhushan Binani always had daughters Shradha and Nidhi Binani Singhania on his side while he was building Binani Cement. However, the slowdown in the construction business affected sales and margins. Binani Cement posted Rs 347 crore losses in FY17 as against Rs 181 crore profit in FY11. Financial creditors claimed Rs 9,469 crore from Binani Cement while the company was undergoing the insolvency process.

This was in contrast to the company’s heydays when Binani fought the Birlas, ACC and Ambuja to build its 11.25 mtpa cement capacity. Troubles began with plants in China and Dubai that failed to make an impact. The domestic demand, too, fell due to a slowdown in the infrastructure sector. Binani cut operating costs but this was not enough to service the debt of over Rs 6,500 crore. It was taken to NCLT in 2017. The flagship asset was sold to UltraTech for Rs 7,950 crore by the bankruptcy court.

Binani still controls holding company BIL, which posted a consolidated loss of Rs 1,255 crore on revenues of Rs 1,642 crore in FY20. It had a market cap of just Rs 17 crore while it was suspended from trading in November 2019. BIL’s major subsidiary, Edayar Zinc (EZL), formerly Binani Zinc, also failed to repay loans, but convinced lenders for a one-time settlement of Rs 175 crore. Binani is looking to sell the plant and machinery as scrap, apart from other mortgaged assets of EZL, including land. BT Composites, another subsidiary, is undergoing voluntary liquidation, according to the director’s report for FY21. The company has sold all its assets and paid off liabilities and has filed an application for dissolution.

BIL’s glass fibre business has been affected by the pandemic and the troubles in the automotive sector. UltraTech recently took over 3B Binani Glass Fibre Sarl Luxembourg by taking over the pledged shares of the company from Bank of Baroda London. BIL Infratech, another subsidiary, has sought resolution of long-term debt. Emails to BIL failed to get any response. In 2019, Punjab National Bank stopped Binani from flying to London on a chartered flight by issuing a lookout notice. The notice was issued as he failed to turn up at the Kolkata Bench of the NCLT after EZL failed to repay a loan of Rs 300 crore.
 

Haldilal

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Ya'll Nibbiars Amtek Failure of The Sincere Person.

Arvind Dham, the erstwhile promoter of Amtek Auto, tried to give away his personal wealth to save the company from bankruptcy in 2017. The low-profile industrialist has been able to sell some non-core assets but not enough to save his flagship company. The Amtek Auto posted a loss of Rs 2,068 crore on revenues of Rs 13,368 crore in FY17, just before filing for bankruptcy. Four Amtek group companies Amtek Auto, Castex Technologies, Amtek Ring Gears and Metalyst Forgings have filed for bankruptcy so far. Then there is JMT Auto, a subsidiary of Amtek Auto.

Dham’s fairytale journey as an original equipment manufacturer to Tata Motors, Fiat and Ford India was unstoppable at one point. Between 2005 and 2014, he made 22 acquisitions in iron casting, metal forging and machining segments. This gave Amtek marquee clients such as Aston Martin, BMW and Daimler. Dham then got into publication, pharmaceuticals and information technology but tasted failure.

The Amtek invested Rs 5,000 crore in the domestic market between 2011 and 2014. However, it led to a cash flow mismatch. In 2014, the business generated $2.5 billion revenue from overseas and $1.5 billion from domestic operations. In financial year ended September 2014, it had a consolidated debt of Rs 17,663 crore.

Amtek Auto first defaulted, on Rs 800 crore bonds, in September 2015. Things went from bad to worse. The admitted claims of financial creditors were Rs 12,300 crore while the company was undergoing the insolvency process. Lenders failed to sell Amtek Auto through the resolution process for four years. Finally, in October last year, they filed a petition invoking Dham’s personal guarantee. But they are not sure whether Dham owns any meaningful assets.
 

indus

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So what happens when a entity is unable or unwilling to pay back it's loans.

Do the bank just write it off and the chapter is closed or the money is recovered from the govt treasury?
If the borrower is unwilling to return the loans, it may be declared as wilfull defaulter. Such as Mallya, who used airline company funds on IPL teams, rather than paying back the banks. Such deliberate defaults are termed as frauds, as is Nirav Modi, Choksi etc. I
Otherwise, proceedings are started under IBC.
 

RoaringTigerHiddenDragon

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<Rant Begin>
I think one of the themes we are missing is how to make the economy grow at 10 for at least 5 years.

Currently the economy is at $3.1 trillion nominal. We will assume the exchange rate more or less remains in the same 72-75 rupees per dollar band for the next 5 years, which it will, due to the galloping forex reserves (currently at $618 billion). I am using nominal only to show growth - please remember that only real GDP reflects the actual wealth.

Year 1 : 3.1 * 1.1. = 3.31 Tr
Year 2 : 3.31 *1.1. = 3.64 Tr
Year 3 : 3.64 * 1.1 = 4.0 Tr
Year 4 : 4.0 * 1.1 = 4.4 Tr
Year 5 : 4.4 * 1.1 = 4.84 Tr

So, for us to get to $5 trillion in 5 years, we need to grow at 10%+. The issue I have is the government is saying we will only grow maximum at 6.5-7% for the near term. This is actually not good news. We need to find a way to grow at 10%+ for a decade at least. This requires drastic reforms and a complete restructuring of bureaucracy and political system. Anti growth Politics like in Punjab and Bengal should be punished - maybe by withholding central grants to these unruly states. All high population states must be given GDP growth targets - achieve a minimum 10% growth or forget central assistance/grants. Give more grants to states that grow the most. A reward system is needed.

Only tough policies can make the country grow. The irresponsible anti growth politics in West Bengal and Punjab must be curbed at all costs. Running a nation takes courage and discipline. We need to put in laws where even if another party comes to power at the center they can never abandon the pro-growth policies and do irresponsible politics. Now is the time to make constitutional amendments to prevent some sort of leftist, fiscally irresponsible government from derailing India’s growth (believe me these leftist, corrupt fools are capable of anything - like that idiot JN who couldn’t retain Aksai Chin and PoJK). If BJP with its majority fails to put in constitutional safeguards just in case a weak coalition government led by incompetent fools comes to power , then we are staring at a repeat bankruptcy and crony capitalism like in the 90s.

It is not a given that the BJP will always win power in the general elections and so now is the time for BJP to make constitutional amendments that completely prevents freebie and corrupt politics.

Some sort of pro-growth laws must be written down and enshrined in the constitution itself like ;

- freebies cannot exceed 1% of the budget
- government corporations/agencies should never run at a loss
- certain industries can never be nationalized
- penalties for states that don’t provide basics like low income homes, water, power supply in a transparent, timely manner.
- penalties for states that don’t build infrastructure or are inefficient or deliberately holding up land acquisition
- an eminent domain law like in the USA where government can compulsorily acquire land for national infrastructure purposes.

BJP needs to reform a lot of laws and I am not seeing them do it. If BJP loses elections, we will once again fall behind the rest of the world but only this time everyone will write off India.
</Rant end>
 

Indx TechStyle

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So, for us to get to $5 trillion in 5 years, we need to grow at 10%+. The issue I have is the government is saying we will only grow maximum at 6.5-7% for the near term.
You can't rule out inflation.
Final GDP = Real Growth rate ± currency appreciation/depreciation ± Inflation/deflation
India won't cross $10 trillions in 2030 at all though.

Also, GDP reflects trade and not wealth. As Indian families will acquire things like cars and gadgets gradually, ratio of GDP to wealth will fall further as did in US, Europe, Japan and China. Purchase will decline but will become more regular and predictable also.
freebies cannot exceed 1% of the budget
Not practical in a country like India. BJP won't win any election to do anything after that anyway.
government corporations/agencies should never run at a loss
Government often bears loss in certain projects to gain certain goals. India's all metro systems today and even upcoming bullet trains will remain at loss and government knows it well. But it will support cities.
Same story goes for defence and research agencies, social welfare agencies and others.
an eminent domain law like in the USA where government can compulsorily acquire land for national infrastructure purposes.
They introduced land acquisition bill earlier but had to back off after furore.
 

SKC

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I Think time has come for India to also look at IT Industry seriously. It is a 200 Billion$ industry and is largely developing on self. We have advantage but we can't be complacent. We need to arrest countries like Phillipines, China, Mexico etc. in the Bud. I think time for Targeted PLI to wrestle contracts from these countries IT firms has come. Like you snatch a client, take PLI:cool1:. These Industries take long gestation time for talent. If we rock the boat they can never stand up in future.

We have to use of enormous Base as a weapon. I am attaching two reports one of Government of Phillipines, where the Dogs are dreaming big and Tholons survey which shows no other Developing nation can challenge us on innovation.

View attachment 101767
View attachment 101768
Philippines lost already. During 2007-8 they were bosting that they will kill Indian IT sector as they are better English speakers then us.
But No! Indian IT-BPO and BPM sector is hardly affected by them and they are reduced to mediocre BPO workers.
 

Haldilal

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Philippines lost already. During 2007-8 they were bosting that they will kill Indian IT sector as they are better English speakers then us.
But no Indian IT-BPO and BPM sector is hardly affected by them and they are reduced to mediocre BPO workers.
Ya'll Nibbiars we are the Leader in the Non Voice BPO. See the Pune billion dollars BPO firms have theirs largest offices there.
 

SKC

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Call centers are vanishing from India as far as I know apart from domestic ones, looks like they don’t like the accents of villagers lol.
Who told you so? BPO sector have become strong.
Even if US user calls BPO they want to know if their call has gone to Indian Tech support as they believe that Indian will solve their prob in 90% of the cases compared to other country BPO which just run around and around among multiple people in calls.
 

Haldilal

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Who told you so? BPO sector have become strong.
Even if US user calls BPO they want to know if has gone to Indian Tech support as they believe that Indian will solve their prob in 90% of the cases compared to other country BPO which just run around and around among multiple people in calls.
Ya'll Nibbiars our BPO sector is larger than many countries combined.
 

Bhurki

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<Rant Begin>
I think one of the themes we are missing is how to make the economy grow at 10 for at least 5 years.

Currently the economy is at $3.1 trillion nominal. We will assume the exchange rate more or less remains in the same 72-75 rupees per dollar band for the next 5 years, which it will, due to the galloping forex reserves (currently at $618 billion). I am using nominal only to show growth - please remember that only real GDP reflects the actual wealth.

Year 1 : 3.1 * 1.1. = 3.31 Tr
Year 2 : 3.31 *1.1. = 3.64 Tr
Year 3 : 3.64 * 1.1 = 4.0 Tr
Year 4 : 4.0 * 1.1 = 4.4 Tr
Year 5 : 4.4 * 1.1 = 4.84 Tr

So, for us to get to $5 trillion in 5 years, we need to grow at 10%+. The issue I have is the government is saying we will only grow maximum at 6.5-7% for the near term. This is actually not good news. We need to find a way to grow at 10%+ for a decade at least. This requires drastic reforms and a complete restructuring of bureaucracy and political system. Anti growth Politics like in Punjab and Bengal should be punished - maybe by withholding central grants to these unruly states. All high population states must be given GDP growth targets - achieve a minimum 10% growth or forget central assistance/grants. Give more grants to states that grow the most. A reward system is needed.

Only tough policies can make the country grow. The irresponsible anti growth politics in West Bengal and Punjab must be curbed at all costs. Running a nation takes courage and discipline. We need to put in laws where even if another party comes to power at the center they can never abandon the pro-growth policies and do irresponsible politics. Now is the time to make constitutional amendments to prevent some sort of leftist, fiscally irresponsible government from derailing India’s growth (believe me these leftist, corrupt fools are capable of anything - like that idiot JN who couldn’t retain Aksai Chin and PoJK). If BJP with its majority fails to put in constitutional safeguards just in case a weak coalition government led by incompetent fools comes to power , then we are staring at a repeat bankruptcy and crony capitalism like in the 90s.

It is not a given that the BJP will always win power in the general elections and so now is the time for BJP to make constitutional amendments that completely prevents freebie and corrupt politics.

Some sort of pro-growth laws must be written down and enshrined in the constitution itself like ;

- freebies cannot exceed 1% of the budget
- government corporations/agencies should never run at a loss
- certain industries can never be nationalized
- penalties for states that don’t provide basics like low income homes, water, power supply in a transparent, timely manner.
- penalties for states that don’t build infrastructure or are inefficient or deliberately holding up land acquisition
- an eminent domain law like in the USA where government can compulsorily acquire land for national infrastructure purposes.

BJP needs to reform a lot of laws and I am not seeing them do it. If BJP loses elections, we will once again fall behind the rest of the world but only this time everyone will write off India.
</Rant end>
You are discounting the effect of inflation.
A 10% growth nominally means 6-7% growth + 3-4% inflation.
Tagret of $5 tn thus requires sustained growth of 7-8% while inflation stays 3-4%(absolute) and 2-3%(compared to us inflation)
 

RoaringTigerHiddenDragon

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You are discounting the effect of inflation.
A 10% growth nominally means 6-7% growth + 3-4% inflation.
Tagret of $5 tn thus requires sustained growth of 7-8% while inflation stays 3-4%(absolute) and 2-3%(compared to us inflation)
True but the government is quoting an inflation included growth rate of 6.5-7%, which is worrying. Unless the government figures out a 10%+ growth rate with less inflation 2-3%, that means real growth has to be around 7-8%, we are not going to be able to get into upper middle income soon enough.
 

fire starter

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True but the government is quoting an inflation included growth rate of 6.5-7%, which is worrying. Unless the government figures out a 10%+ growth rate with less inflation 2-3%, that means real growth has to be around 7-8%, we are not going to be able to get into upper middle income soon enough.
No govt is quoting nominal growth.
 

SKC

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If he is successful with imports why even bother to setup a factory. Keep importing stuff and save coast on local manufacturing. This is exactly what smartphone manufacturers were doing until recently.

Also GoI isn't inviting companies to manufacture goods for Indian markets only. They are free to export to anywhere they want, With very little export duty.

Asian companies invest in a country to create a market where American companies invest to capture a market. There is a great example of Suzuki. They started manufacturing in India when there was almost no demand for cars. India didn't even have proper highways when Suzuki were selling their 800s. Look at Indian auto market today. They took the greatest risk and received greatest reward.

If Tesla properly studies Indian market and starts manufacturing some India specific electric car below 20 lacs it will easily be successful. Ofcourse he doesn't want to do that. Thats too much work and too much risk. He just wants to sell one size fits all approach in an already established market so he can easily print money on day one.

This is one of the reasons why Japanese, Korean and nowadays Chinese companies are beating American companies.
Correct, companies are free to make product for any other market in India.

Ford is pretty much dead in India but still one of the largest exporter of from India.
 

Roshan

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Ya'll Nibbiars and always remebers this Ambani was, is and always will be Khangress ka chacma.

View attachment 100854
interesting blast from the past.


Bombay Dyeing-Reliance feud: RIL executive arrested on charge of conspiring to kill Wadia
The Bombay Dyeing-Reliance Industries feud took a startling twist with the arrest of senior Reliance executive Kirti Ambani on the charge of conspiring to kill Bombay Dyeing Chairman Nusli Wadia. A volatile mix of politics, crime and business, it is the political dimension of the case that is most intriguing.

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Raghu Nandan DharM. RAHMAN.Prabhu ChawlaAugust 31, 1989ISSUE DATE: August 31, 1989|UPDATED: October 30, 2013 17:56 IST






The protagonists are a study in contrast. On one side, Dhirubhai Ambani, a street-smart operator whose rags-to-riches story has rewritten corporate history and radically changed the rules of the market-place. And ranged against him, Nusli Wadia, a suave, sophisticated tycoon descended from centuries of empire builders.
The contrast does not end there. Ambani presides over the fastest-growing industrial group in the country with assets of Rs 3,875 crore. Wadia is chairman of Bombay Dyeing, a conservative institution with assets of just Rs 259 crore.

Despite that, their battle has become one of the fiercest and most personalised in Indian corporate history, involving not just business rivalry but also the most powerful personages in the country. But now, even by their extreme standards, what is unfolding is, possibly, the bloodiest chapter in the cutthroat war.

The arrest last fortnight of Kirti Ambani, a senior employee of Ambani's Reliance Industries for conspiring to murder Wadia, exploded like a well-timed bomb, shaking the judiciary, the bureaucracy, the corporate sector, and, above all, the political establishment.

By last week, as Kirti, 48, Reliance general manager (public relations), was finally released on bail after spending sleepless nights in a dingy Bombay police lock-up, the case had created ripples that reached the office of the prime minister, caused deep rifts in the ruling party, and almost jeopardised the career of Maharashtra Chief Minister Sharad Pawar. The reason for the widespread tremors: the tentacles of the Ambani empire reach into every corner of the Government's power structure, while Wadia has the unrelenting backing of the Ramnath Goenka-owned Indian Express newspaper chain. Wadia is also a good friend of Pawar.


Claims and Counterclaims
Ambani Camp
  • Why would the Ambanis want to eliminate Nusli Wadia? He is much too insignificant a business rival for them to take such an extreme and foolhardy risk.
  • They are among the fastest growing industrial houses in the country. They have no need to stoop to such criminal activities at this stage of their growth.
  • Nusli Wadia blames his business set-backs on the Ambanis. He is trying to retaliate by taking the support of the Indian Express group.
  • This is a frame-up essentially aimed at undermining the unprecedented Rs 920-crore public issue of Larsen and Toubro to be launched in a few weeks from now.
  • Why would they hire a small time criminal like Babaria? If they had to eliminate Nusli Wadia, they would have surely employed a professional killer who could do the job quickly and efficiently.
Wadia Camp
  • Dhirubhai's sons, Anil and Mukesh, hold Nusli Wadia responsible for the stroke which almost crippled their father in 1986 following the pressure put on him by V.P. Singh and the Indian Express.
  • Wadia would be a major source of information about the Ambani's business dealings if a new government headed by V.P. Singh is formed.
  • By silencing Wadia, the Ambanis will silence the Indian Express. They believe Wadia is keeping the Express afloat.
  • The conspiracy to kill Wadia was hatched months before Ambani applied for the L & T share issue.
  • Since all the top hit men of Bombay have recently been liquidated or arrested in the police crackdown, there was no choice.
It is these larger dimensions that have given the case a sensational twist, as has the modus operandi for the alleged plot - hiring contract killers from Bombay's underworld to eliminate Wadia. Though the Ambanis have been tight-lipped, apart from a press release on the day of the arrest terming the case "a frame-up", the Bombay police seemed to have a substantial case.

The two men involved in the investigation, Police Commissioner Vasant Keshaorao Saraf, 55, and Joint Commissioner (Crime) Arvind Siddeshwar Inamdar, 48, have impeccable reputations. But even they were startled last month when a senior Crime Branch inspector reported a meeting with an underworld contact in which he learnt of a 'supari' contract floated last November. 'Supari' contracts, in which gangsters are paid to carry out a killing, are nothing unusual in Bombay's underworld. But the target of this one was someone special: Nusli Neville Wadia.

The events that followed exposed the explosive implications of the case.

July 12: A day after Wadia landed in Bombay after a trip abroad, Saraf detailed a team to protect him.

July 17: Saraf sought a meeting with Pawar, met him along with Inamdar, and detailed the extraordinary dimensions of the case. Worried that the information would leak to the Ambanis, the two police officers insisted that only the chief minister who is in charge of the home portfolio, and Home Secretary S. Ramamoorthi be briefed. Minister of State for Home Vilas Sawant who is said to be close to the Ambanis was kept in the dark.

July 20: Ramamoorthi wrote to his counterpart at the Centre, detailing the case, emphasising its seriousness, requesting that Union Home Minister Buta Singh be informed, and suggesting that the CBI be asked to take over investigations.

July 23: Getting no response from New Delhi, Ramamoorthi sent another letter asking for instructions.

July 28: With the Centre still maintaining a deafening silence, Pawar gave the signal for the arrest of Kirti Ambani who was out of Bombay; the police decided to wait.

July 28: CBI boss Mohan Katre, known for his close links with the Ambanis, flew in to Bombay. Unusually, Katre went to the Bombay High Court where Wadia's visa case was being heard even though the CBI had nothing to do with it.

July 31: Kirti returned to Bombay from Patalganga. At 7.30 p.m., Crime Branch officers visited his office at Nariman Point and then accompanied him to his plush residence situated in Twin Towers complex, a lane away from Wadia's idyllic beach-side bungalow. While the house was being searched, another posse of officers picked up Arjun Waghji Babaria, 35, from his modest, powder-blue tin shack in the backyard of the Bhendi Bazaar Police Quarters. Babaria, a podgy, goateed drummer who called himself 'Prince Babaria' was known to be a 'fixer' who arranged contract crimes.

August 1: Kirti Ambani and Babaria remanded to police custody.

The arrest and subsequent details of the case left observers dumbstruck. Kirti is known to journalists as an amiable, soft-spoken .public relations man who often acted as a spokesman for Reliance. But since 1985, he had also been in touch with Babaria. In an album seized from Babaria's house, police found photographs of the two together. They also found newspaper photographs of Wadia and his black-topped Buick.



However, the likelihood of the Ambanis, despite their street-fighting image, stooping to murder, was received with incredulity. The immediate reaction was that the Ambani arrest was part of a larger political game involving Pawar and his fragile relations with the Centre. The fact that Pawar is a friend of Wadia and has no love lost for the Ambanis only added to the swirl of speculation.

But there was also the other side of the story: the fact that the Bombay police is known for its apolitical image and that the two officers, Saraf and Inamdar, were the least likely to be involved in any political shenanigans. Both have unimpeachable reputations for integrity and ability. Saraf, who became commissioner two years ago, worked in the CBI in the '60s, then in raw and the Intelligence Bureau. Inamdar, famed for refusing to bow under political pressure, has been transferred 22 times in his 25-year career. The state Government had even recommended his transfer to the Centre; Saraf had stalled it.

Babaria
Then, as bits of the evidence started leaking out, the murder case began to look more plausible. According to the police, Kirti allegedly sounded out Babaria last November for arranging the killing of a 'big businessman'. Babaria was a fixer with widespread contacts in Bombay's underworld. The contract, according to police sources, was worth Rs 50 lakh and Babaria was to be the go-between.

But finding the right contract killer was proving difficult. For, the last 18 months had seen a police crackdown which had left many contract killers dead or in jail. Babaria apparently decided to use small-time killers, hoping to keep a larger share of the 'supari' money. By the time he was arrested, he had acquired a Premier Padmini car, a colour TV set, jewellery and other valuables.

Kirti outside courtroom
Babaria introduced 'Shanu', a young gangster involved in two murders, to Kirti as 'Shakeel', one of Dawood's well known hit-men. Babaria and 'Shanu' met Kirti several times at two hotels, Horizon and Palm Grove. The plan allegedly was to block Wadia's limousine with another car as he emerged from his bungalow in Prabhadevi and gun him down. Alternatively, Wadia was to be killed as he left his office at Ballard Pier, which is quite deserted at his usual departure time of 8 p.m.
Police say that the murder plot was far advanced. Two revolvers had been acquired and others hired for the job. 'Verma', a garage man from Babaria's area, was paid Rs 50,000 to buy the guns and drive the getaway car, while a second, unnamed gunman was hired for Rs 10,000. But the actual execution was delayed because they were looking for a third gunman They were also unsure of escaping. And Wadia's frequent trips abroad did not help either".

CBI boss Katre: Ambani supporter
After several postponements, July 24 was fixed as D-day. But Crime Branch officers had, by then, stepped into the picture. The sleuths made Babaria telephone Kirti Ambani from, the police station and recorded three conversations between them and another between Kirti and 'Shanu'. On one of.the tapes, Kirti allegedly complains: "Why hasn't it been done yet? The bosses are after me."

Adding spice to the speculation is the fact that rivals of the Ambanis have in the past often run into unusual accidents. Pankaj Mehra, son of Orkay's Kapal Mehra, was in 1982 beaten up and left in a ditch in Patalganga Jamnadas Murjani, president of the All-India Crimpers Association, and a vocal critic of Reliance was attacked with a sword in 1986 in Bombay. And Bipin Kapadia of a rival firm, Hakoba Embroidery, was attacked with a knife, in 1974, outside Akbar Hotel in New Delhi.

The arrests made, Crime Branch officers started grilling Kirti and Babaria, confident of extracting the details of the alleged conspiracy. But then, expectedly, the Government woke up to the significance of the case. Since the request from the state Government for the CBI to take charge of the case was already in the files. New Delhi issued a notification within 24 hours,directing a take-over.

By handing the case over to the CBI, the Government has suggested it is protecting Ambani.
For Pawar, the Centre's action - and the Ambani case - was a godsend. The past fortnight had been like a nightmare: a revived plot dereservation scandal; a statewide strike by municipal employees; a strike by taxi and truck operators; and finally, the bombshell dropped into his lap by his police. The Ambani case could have worsened matters by antagonising Delhi, which though wary of Pawar had decided he was quite indispensable till the elections. But, In the event Pawar played his cards shrewdly. He kept the Centre fully posted of the developments, and even welcomed the CBI intrusion. This left him in an unassailable position: if the CBI exonerated Kirti, it was Centre's skullduggery, if it proved the existence of the plot then Pawar stood vindicated.
But at the same time, the sudden involvement of the CBI added other political twists to the case, CBI chief Katre is known to be extremely close to the Ambanis and his frequent extensions are largely attributed to the way in which his organisation has managed to hush up a number of investigations embarrassing to the ruling party and Rajiv Gandhi. To many, the CBI'S involvement signalled the Centre's way of reassuring the Ambanis.

Inamdar (left) and Saraf: solid case
The frenetic activity once New Delhi gave the go-ahead only served to confirm that view. As the Bombay police laboriously compiled the evidence and the case papers for handing over, CBI officers frantically tried to hasten the process, virtually camping at Ramamoorthi's office on August 5 in a desperate bid to get custody of Kirti before the weekend passed. With the Bombay police insisting on originals and not facsimiles of the orders from New Delhi, it was August 6, a Sunday afternoon, by the time the CBI officers got the investigation papers in their hands.
But they were faced with another dilemma. They had managed to get Metropolitan Magistrate J.W. Singh to agree telephonically for the transfer of Kirti and Babaria, who had been remanded to police custody till August 8, into their hands. But the Azad Maidan Police Station lock-up normally used by the CBI was considered unsuitable for the prize detainees.
A he reputation of the two Bombay police officials who handled the complex case gives it a certain legitimacy.
It was nightfall by the time alternate arrangements were made at the Colaba Police Station, and the CBI once again displayed its unseemly hurry by whisking away the two accused from the Crime Branch lock-up at 10.30 p.m. on Sunday. Even so, because of the absence of 'panchas' on Sunday, the CBI failed to take possession of some crucial evidence; - four audio cassettes of recordings of Kirti's telephonic conversations with Babaria and 'Shanu', the main hit-man.

By now, the Wadia camp too was working overtime. Ensconced in his penthouse on top of Express Towers in Bombay's Nariman Point, the ailing Ramnath Goenka, who Wadia refers to as his godfather, was marshalling his forces and finalising strategy.

As expected, the morning after the CBI stepped into the case, the irrepressible lawyer Ram Jethmalani filed a writ petition before Justice S.P. Kurdukar and justice Ashok Agarwal challenging the transfer of the case to the CBI. The petition was filed on behalf of Anil Gote, a journalist and leader of the Shetkari Sanghatana who has close links with the Indian Express. The judges granted a stay, restraining both the CBI and the Bombay police from acting further in the matter.


Even before the proceedings began, Justice Agarwal surprised everyone by declaring that he had fixed deposits in Bombay Dyeing and owned shares in Reliance. No objections were, however, raised by counsel, and a 90-minute battle began on whether the CBI or the Bombay police should seek an extension of the remand for Kirti and Babaria which expired that day. Criticising the frantic efforts by the CBI to take over the case, Jethmalani declared: "Dark deeds are always done at night and on holidays." Goenka's Financial Adviser Gurumurthy who has written exhaustive exposes on Reliance later said: "Only Ambani in this country has the choice of who should be the investigator. No sensible government could have gone to this length. So transparent is the Government's acquiescence that I am close to believing that someone is blackmailing the Government into such palpably incredible acts."
The Wadia-Ramnath Goenka axis, with the Indian Express as its spearhead, is widely viewed as anti-Rajiv.
In his petition, Gote contended that the CBI had no jurisdiction over the case, and its investigation could only be unjust and malafide since Katre was not only a Reliance shareholder but had revealed a clear bias in favour of the company in the past. The CBI, however, asked for an adjournment to file its own affidavit.

The next move in the legal chess game was by the Ambanis. Mukesh Ambani, Dhirubhai's eldest son, flew in to Delhi. Shortly after, on August 9, R.K. Amin, member of the BJP's national executive, and known Reliance lobbyist, quietly filed a writ petition in the Supreme Court demanding the transfer of the case to the CBI.

Within hours, a division bench of the Supreme Court allowed the petition and ordered that the case be transfered to the CBI. But the Ambani strategy floundered on mere happenstance. A junior advocate working for the Express group wandered into the courtroom just in time to hear the judgement. Jumping into her car, she drove to Parliament and informed Jethmalani who was attending the session as a member of the Rajya Sabha.

R.K. Dhawan
Jethmalani rushed to the Supreme Court and interrupted the court proceedings in the middle of a hearing. Declaring that "a fraud had been committed on the judiciary", he appealed to the judges to review the order. In a bizarre twist, the bench reversed their own order and ruled that neither the CBI nor the Bombay police would investigate the case till August 21.

But the real battle, inevitably, had already unfolded in the corridors of power. The reason why the Centre had been tardy in reacting to the Maharashtra Government's plea for the CBI to take over the case was because of the sharp divisions in government circles on the Ambani connection.
On August I, Pawar had received a call from R.K. Dhawan, the prime minister's political aide and the most prominent member of the pro-Ambani clique. Dhawan informed Pawar that the CBI would be taking over the case. On August 2, the Centre issued a notification for the CBI to take over the case. The same day, Pawar sent a letter by hand to the Union Minister of State for Personnel, P. Chidambaram, stating that "since the case has inter-state implications, it should be investigated by the CBI".

Chidambaram, whose ministry the CBI comes under, brought this to the notice of the Prime Minister's Office (PMO). According to Home Ministry sources, Katre had already prevailed upon Chidambaram to obtain formal transfer orders from the ministry.
Dhawan backing the Ambanis and Deshmukh opposing them, the political battle lines are drawn.
But key bureaucrats were against the CBI'S involvement. It is well known that senior bureaucrats in the PMO, most notably Principal Secretary to the prime minister, B.G. Deshmukh, are unhappy with the clout the Ambanis wield. The PMO had, in fact, taken the stand that since the case was purely a state problem, the Centre should avoid getting involved. Finally, however, it was Dhawan's view that prevailed.

The political tussle even led to the surprise inclusion of Kirti's arrest on Doordarshan news the same day. So all-pervasive and widely known is the Ambani clout that the news item seemed an aberration and sparked off considerable speculation that the ruling party was finally distancing itself from the Ambanis. At the same time, the arrests were widely viewed as Pawar's way of announcing his independence from the party's Central leadership and getting back at the Ambanis. Pawar and his supporters were convinced that the adverse publicity in the press over the scandal was because of well-placed leaks by the Ambanis. In fact, Satish Sharma had been brought in to mediate between Pawar and Ambani.
The real political fall-out of the entire controversy will depend on how the Centre instructs the CBI to handle the case. In political terms, it is undoubtedly a hot potato. Even more so in an election year when industrialists are called upon to finance campaigns. But that is also a Catch-22 situation. If the CBI, as widely expected, allows the case to drag on till after the elections, the Opposition is certain to exploit it during the elections.

B.C. Deshmukh
On the other hand, if the Government does decide to pursue the case, they will be making a powerful enemy in Ambani. It is widely known that the Ambanis have a foot in both camps and will still wield considerable clout even if an opposition government comes into power.

That perhaps explains the current division in the ranks of the ruling party and the attitude of powerful bureaucrats in the PMO. The Ambani's strategy is to project the case as a frame-up to not just undermine them but also the ruling party. As Dhirubhai Ambani told india today: "It is total frame-up. It is the handiwork of the same people who cooked up similar sham cases every time we went for major public issue in the past. Look at the people in the front and those behind them and you will know all the hows and whys of their underhand arrangement."

Ambani's reference is to the Express troika of Goenka, Gurumurthy and Arun Shourie. Clearly, the Ambanis will try and portray the case as part of a scenario to challenge the authority of the Centre.

That is perhaps inevitable. The Ambanis are now - at least in the public eye - synonymous with the Rajiv Government. The list of Ambani supporters reads like a Who's Who of the ruling party and includes Dhawan, Finance Minister S.B. Chavan, Finance Commission Chairman N.K.P. Salve, Minister of State in the PMO Shiela Dikshit, Bombay Congress(I) chief Murli Deora and Union External Affairs Minister P.V. Narasimha Rao.

There are, however, powerful enemies as well. Apart from key bureaucrats in the PMO, the anti-Ambani lobby consists of Home Minister Buta Singh, Railway Minister Madhavrao Scindia, P. Chidambaram, and a host of Congress(I) MPs. More important, their meteoric rise and their abrasive business ways have antagonised influential business families like the Goenkas, the Tatas, the Chhabrias and the Hindujas. They also have to contend with the aggressive media campaign spearheaded by the Indian Express.

Jethmalani (right) and Gote after the hearing: legal chessgame
Predictably then, the case is creating rifts in the ruling party. During last week's Parliament session, over 60 Congress(I) MPs signed a memorandum requesting Rajiv not to transfer the case to the CBI. Only a last minute, desperate intervention by Dhawan resulted in the resolution being withdrawn.

What is worrying many ruling party members is that the case has the potential of becoming an embarrassing election issue. The Rajiv government has given the clear impression that it favours the Ambani camp. This bias is proving counter-productive. The Kirti case no longer remains another underworld murder plot. It has become the symbol of a malaise that has seeped into the nation's politics and economy over the last three years. Literally, the entanglement of the country's institutions - the Government, press, politicians - in a web of patronage and corruption.
 

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