Kishore Chaukar: He's been at the eye of the storm

That the Tata group is a stranger to controversy is obvious from the way it botched things up last fortnight in the Tata Finance Ltd (TFL)-A.F. Ferguson affair. First, it quietly sat on an internal report it had instructed the firm to come out with on the apparent misdeeds at its financial services arm, then when the report duly finds its way into the press, the Tata Group accuses "sections of the media" of "deliberately" distorting the report. But the publishing bosses wouldn't have minded: Bombay House spent a good few lakhs on full-page advertisements to make its case.

Perhaps the group's spin doctors forgot that golden rule that a few column centimeters of editorial is worth much more than a full-page insertion. And you could even say that the advertisement has backfired on the Tata Group because it now stands accused of selectively defending itself, leaving many questions still unanswered.

The Tata group hasn't emerged smelling of roses after this sordid episode, the reluctance to be transparent being its biggest crime. But are Ratan Tata and his band of head honchos guilty of suppressing damaging information about them, arm-twisting Ferguson to junk the report, and doctoring the books? Predictably, those answers are still as elusive as the abominable snowman, but as the mud was being flung on Bombay House last fortnight, it was easy to forget that it was TFL itself that had roped in Ferguson to come out with a report. And that it was TFL that had filed an fir with the Mumbai police last August against former Managing Director Dilip Pendse, charging him with forgery and cheating, amongst other crimes.

Ferguson was first ready with its report last November (around the same time the TFL board resigned). The Tata Group wasn't satisfied with the report, and sent it back. In April, Ferguson put out the second report, all of 904 pages. TFL rejected it once again as it felt that there were some blatant exceptions, which could significantly impact the issue at hand. For instance, a four-page affidavit-Y.M. Kale, Partner at Ferguson in charge of the investigations, had spoken to some 50-60 tfl officials, on the basis of which he had made special affidavits-in which the former company secretary of TFL apparently is on record saying that Pendse ordered him to falsify accounts. This was done to make the company's financials look more attractive to shareholders as there was a rights issue round the corner.

More than a month after receiving the report, on July 23, TFL wrote back to Ferguson, saying that it did not agree with it. In the days that followed, the 14 partners of Ferguson met and decided to pull back the report. On July 2, Ferguson withdrew the report. A day later it made the newspapers. Of course, it wasn't a report any more by then.

-Brian Carvalho

SELF WORTH
He's No Turkey
WalMart's Supplier of the Year award has catapulted Rajinder Gupta into public consciousness.

Trident Group's Rajinder Gupta: WalMart sells his towels

An eponymous politico was all sleepy Punjab village Barnala was known for. Now, former Chief Minister S.S. Barnala has to share his celebrity status with a 42-year-old high-school dropout who is still building his vocabulary. Ever since he bagged WalMart's Supplier of the Year award in May this year, Rajinder Gupta has been Barnala's toast.

From two highly mechanised facilities in bucolic Barnala, Gupta-a phonetic rendering of his initials, Argee, is how he is known within his Rs 600 crore Trident Group-makes and supplies terry towels to Nautica, Martha Stewart, and # 1 in the Fortune 500, the $218 billion (Rs 10,63,055.2 crore) retail giant WalMart.

For someone who started life-like his father-a fertiliser trader, that's some achievement. His first venture (he was 23 then and the year was 1983) was Trident, a super-phosphate and sulphuric acid manufacturer. Argee switched businesses to keep the group afloat. Fertilisers went out, paper came in. Then, in 1991 he got into yarn and, in 1998-99, terry towels. Circa 2002, Trident has interests in chemicals, it education, construction, paper, yarn, and towels.

When this magazine caught up with him, Argee had just returned from a management fellowship at Oxford's Templeton College. ''We bagged the WalMart award as we could match quality and quantity with competitive pricing,'' claims Gupta. And he is confident his homespun 3Ps gospel-perseverance, passion, persistence-can make Trident ''the largest terry towel player in the world''.

It isn't easy exporting towels. The US and Europe are the biggest markets, and Brazil and Turkey, the main rivals. Turkey has an edge when it comes to serving Fortress Europe: it is part of the European Union and geographically well-placed to get its products into Europe by road in four days flat. Trident takes a month.

Then, there's price. Overcapacity has seen the price of terry towels fall some 25 per cent over the past two years. That hasn't deterred Gupta from plonking down Rs 330 crore to expand capacity.

For someone with his educational background, Argee has invested in technology-the latest is a Customer Relationship Management module that helps the group customise products-and built an organisation that swears by modern management techniques. Trident is an aggregation of strategic business units (SBUs) with set financial targets. And Gupta pays well-double the competition, swears an employee.

The competition is bemused by Gupta's meteoric rise and one rival puts it down to political patronage that helped Trident diversify and keep its operations going during terrorism's heyday's in Punjab-a period when most other businesses went into maintenance mode.

Meanwhile, back from Oxford, Argee wants to ''learn new skills, build my vocabulary, and increase (sic) the firm's core competence''. And son Abhishek Gupta, all of 15, looks ahead to being another ''Bill Gates''. It took some cajoling by mother Madhu Gupta for him to say that. ''He's just like his father,'' she gushes. ''Shy, but with tremendous will power''. And with a jet-black plaque from WalMart to boot.

-Moinak Mitra with additional reporting by Ishara Bhasi in London

INTERVIEW
"I Have Confidence In DRL"

Last month, Novo Nordisk, the Danish Kroner 23.77 billion (Rs 15,212.13 crore) pharma major, suspended clinical development of a dual-acting insulin sensitiser, ragaglitazar-a molecule licensed by the Hyderabad-based Dr Reddy's Lab. In an interview to BT's R. Sridharan, Novo Nordisk Chairman Mads Ovlisen explained why that doesn't affect its relationship with Dr Reddy's.

Are you disappointed that the Dr Reddy's molecule trials had to be suspended?

Yes, we were disappointed because we had progressed quite far and it seemed that the drug had potential. It would have helped people regulate not only blood sugar but also the fat level in their blood stream. Unfortunately, we saw some adverse affects in mice and had to stop.

Does it mean Dr Reddy's Lab has to do more work on its molecules before licensing them out?

No, you cannot generalise this. Only one in a thousand new molecules reach the marketplace and this is a risk that any pharmaceutical company runs, and I have great confidence in Dr Reddy's, with whom we continue to work and will continue to work.

How does Novo Nordisk look at India as a market?

We are very active in India, and have both our businesses-personal diabetes and enzymes-operating in India. I am very proud of our India organisation, especially the way it has been able to make diabetes drugs available to Indian patients.

Are there any plans of setting up R&D in India?

We will continue to work with Indian groups and do contract research. We have no plans of expanding production because biotechnological production is extremely costly and a big issue is scale (of manufacturing).