Dear All,
I appreciate the efforts put by Sanjay and Ravindra. Really mt friedns ur both are correct on ur views. It everybody's perspective that makes the opinion. But i m feeling happy coz we r getting time to discuss good things.
Any ways sanjay where r u from?
Vikas Godage
Ravinder Singh <corruptionfree06@yahoo.com> wrote:
Scanning Tatas Takeover Issue
There is complete lack of understanding of the functioning of our corporate and taking tear jerking complaints of Tatas and others as truth. Facts are entire industry conspired with connivance of the corrupt government.Google IPO came exactly two year ago and market cap then was $30b, which stands just $150b presently. Even IPO landed Google far ahead of any Indian company operating for 100 years. Worth of just one tech company founded by three engineers nearly a decade ago is worth more than the combined wealth or shareholdings of all Indian business families operating for 50 years or more clubbed together – Even interest on the tax concessions and incentives may be more than their present worth.His comments about $8b going out of India lightly is most amusing when considering that Americans or Europeans Complain each time a job is lost to BPO in India offering the service at a tenth of cost. Indians still have slave mindset and have yet to learn to think with open and independent mind.Sanjay's comments about denial of new projects or licenses are invalid. I remember Tatas got approval to manufacture even shoes under Taj Brand and cosmetics under Lakme brand that were reserved for small-scale sector. They wanted to do everything with peoples money.Biggest "Laugh" you will find in the Economic Times issue of today. I will shock you all to learn that NRI even now were permitted to send $2500 a month or $30,000 annually which Manmohan Singh government is considering to double soon.What kind of liberalization we see in this? When country was on verge of default in serving foreign debt due to the mischief of the Industry, even NRIs were not permitted to invest in Share Markets and the limit was 1% for NRI in a year and maximum quota was 5%. I vigorously campaigned against it in 1995.Rahul Bajaj formed "Bombay Club" after agreeing and supporting IPR initiative in Delhi and prevented faster IPR regime in the country that would have helped young inventors serve global markets.Ratan Tata was not as vocal as Rahul Bajaj for he had only 3% or 4% equity in Tata Group, which through manipulation with GOI/ SEBI has now risen to around 30%. Ambanis floated benami companies to capture floating shares and consolidated hold over Reliance.Mittal success is a entirely different story. Sanjay's comments about Mittal are unjustified and grossly unfair. He operated self owned company raised the money in Europe and international market in a transparent manner and revived steel companies that were virtually "Bankrupt". All the assets and liability were Mittal's responsibility.· Ratan Tata used Indian money to the extent of $3b to fund his personal owned company Tata Steel UK. (Sanjay has not responded to this)· Ratan Tata never allowed or wanted NRIs to take shares in his companies but clandestinely fooled India and Indian shareholders in to extending credit of $3b to UK Company.· Going back in early 80's Swaraj Paul paid three times the market price for Escorts shares but his shares were not listed and entire industry ganged up to deny Swaraj Paul investment.Sanjay doesn't know that most multinationals all have Board of Directors who appoint CEOs purely on merit but India "Lallu Panjus" or mediocre run the companies on lifetime basis. Rahul Bajaj, Vijay Malya, Mukesh Ambani are just manipulators.Competition is intense and CEOs drive the companies, inspire the workforce and satisfy the shareholders.Ratan Tata took out $3b of Indian money and put in a UK company without informing people of India and shareholders about the interest rates and shareholding pattern of Tata Steel UK.Only yesterday Jeff Skilling was put in jail for 24 years. Indian companies indulged in all kinds of frauds cashed the advantages and opportunities offered to Tatas, Ambanis and Malaiya.Tatas wanted all kinds of tax concessions and exemptions. Tatas blackmailed and threatened to pull out of Small Car project in Kolkutta and wanted land at prime location almost free. Poorest people in the world subsidize Ratan Tata industries.Tatas claim to be a 130 years group, taking over of Corus with largely Indian money contributed by 90 companies (Tatas own 30% equity) doesn't reflect any praise worthy performance.Ravinder Singh October27, 2006"Sanjay Jadhav" <sanjayjadhav1999@yahoo.co. in> --- My comments are inserted with prefix SJ: within bracket.Sanjay JadhavYashwants comment is like Indian proverb – After hearing the entire Ramayan, the listener asks who was Sita.We are definitely proud of Mittal who turned around loss making Steel Plants across the globe with own money and resources. Tatas on the other hand is capitalizing on the business developed over a century by his forefathers and funded by Indian shareholders.(SJ: It is matter of subjective judgment whether Tatas or Mittals are good. Tata being hyper obedient to government rules, it was only natural that they could not take out foreign exchange against prevalent laws. Today, off course, nobody believes in the sanctity of FERA or COFEPOSA. Therefore whatever small Foreign exchange Mittal took out by can be pardoned. Turnaround of loss making units is a special skill, not everybody's cup of tea and Mittals deserve applause for that. Tatas operating on fourth generation is not a stigma, though Mittals deserve special praise for astounding growth in single generation. I believe that Mittals, Mallya, Reliance has better skills for turning around. Culturally they can become harsh on employees and can hard decision than Tatas.)I try to be very brief covering the entire issue in just one or two pages. If Yashwant has not understood than I think he is like the listener of Ramayan who asked in the end- who was Sita.Bankruptcy of good story in such is such that almost every day we talk of 8% growth when actual could be 5% or 6% and have very little else to tell the world,(SJ: It seems paradoxical that electricity is in short supply whether for industries, commercial consumers as well as for domestic consumers. 10% of the organized labour is suffocating employment opportunities for 90% from unorganized sector and job seekers. Industries derive their competitiveness from tax concessions and license raj. Very few sectors enjoy global competitiveness based on natural resources or knowledge. Many natural resources like coal, steel, oil, salt, vegetables, cheap labour, sunlight are yet reach their full potential. Therefore sanctity of 8% growth is suspect. Growth is not based on competitive advantage of key resources, it is not inclusive and not sustainable. )outflow from India of $4b to $8b by a company to finance a foreign company becomes great news; this amount is almost equal to two years FDI in India.(SJ: Only $3.4 billion are being paid by Tata Sons and balance would be raised from market.)When a British Company (Tata Steel UK) executes the take over, all the taxes will go to British government. So it translates in to a fact that INR 15,000 crores to INR 30,000 crores shall go out of India in to UK and approximately INR 2000 crores annually shall go in to British accounts as taxes. Lets see GOI clear this take over.(SJ: Every inward/outward foreign investment behaves in identical manner. Between 1948 to 1991, government viewed all inwards investment as loss of control and all outward investment as theft of capital by entrepreneurs/foreigners. Socialist minded governments view every profit centered decision of companies as conspiracy and greed. That policy has not worked in anybody's interest.) Malaiya didn't read my message, we should welcome inward FDI but are foolishly celebrating out flow of billions. Some friends report Indian deposits in foreign secret accounts in excess of $250b. Such out flows will become a routine and flight of capital will be through open as well as hidden channels from now on.It is atrocious to compare Tata & Mittal.Mittal's takeovers were not funded by poor India. (SJ: Tatas did not indulge in take over of foreign firms, when foreign exchange was scarce and outflow of foreign exchange was illegal.) Let remind that over 50 crore people in India don't have electricity,(SJ: Tata steel was not allowed to produce electricity for selling in Bihar. Tata Power was not allowed to sell electricity out of Mumbai in order to protect the poor Indians from profiteering business people. Subsidiary of Tata Steel is not licensed to supply out of Tatanagar/ Jamshedpur and Jharkhand Electricity Board is not ready to give away additional area to Tata Steel. Therefore retaining the capital in India is less of virtue in addressing the electrification.) when India is critically short of capital for essential infrastructure(SJ: the painfully slow decision making of government & irrational pricing of electricity and petroleum fuels are adequate in dissuading private sector in their retailing. The government policies do not show trust in private capital in electricity distribution, coal, road and it does not think rational pricing as prerequisite for attracting capital in infrastructure. Surplus investible capital should not be assumed to be available for electricity.) Tatas adventure of flying out $4b or more- the deal is not yet closed- is most unfortunate. (SJ: I will beg to disagree.) Tata or Ambanis were always "Commission Agents". The capital outflow could have installed 4000 MW to 8,000 MW capacity (SJ: This is Mahalnobis thinking of conservation of capital independent of pricing of commodity. It has not worked in India and dozens of communist countries.) and taxes to finance 500 MW unit every year. (SJ: Erecting of next generation of unit is an option exercised by entrepreneur based on profit potential of the venture. This is not contingent on availability of capital or idle capital with entrepreneurs. Second rule of economics says that opportunity for premium price of commodity in market instigates new producers for production or enhancement of production capacity for existing producers. Therefore entry & exit of capital are natural phenomenon. I personally do not find convincing that surplus capital from more profitable steel manufacturer can/should be deployed in less profitable electricity generation.)I don't blame Malaiya, misfortune India is that Manmohan Singh finds nothing wrong in flight of $4b to $8b and annual taxes going in to British account. (SJ: If we assume RoI 25% on invested capital of $3.4 billion, it comes profit after tax 0.85 billion and tax could be 0.5 billion. The number needs verification. Government is not showing adequate interest is liberalizing iron mines for steel manufacturers. Therefore flight of capital is eminent.)We don't expect people working under Manmohan Singh or ABV to be smart and intelligent, only dumb minds could tolerate daily doze on nonsense. (SJ: Here I fully agree with you. People, who give more importance to ownership of coal mining Company than creating employment for poor/illiterate people of Jharkhand/Chhattisgarh/Orissa, are ought to be mediocre. The public policy ought to be tuned with rational mindsets, which seem to be absent in babus.) Ravinder Singh October22, 2006
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