|Subhash Chandra: Back at the helm
The family know
its business best. Subhash Chandra, Chairman of Zee Telefilms, after
a string of failed experiments with professional CEOs, has come
to the conclusion that he and his brothers stand a better chance
of turning around the fortunes of the beleaguered media conglomerate.
decision to oust the professional at the top in favour of family
isn't without precedent. Two years ago-also in October-the Ford
family sacked its high-profile CEO, Jacques Nasser, as it disagreed
with his turnaround strategy for the world's second-largest car
maker. His seat was filled by the great grandson of founder Henry
Ford, William Clay Ford Junior, who was also Chairman since 1999.
The similarities between Ford and Zee end there.
Unlike Sandeep Goyal, who was brought in as CEO a little over a
year ago, Nasser was a career Ford executive. Chandra, on the other
hand, has had a go with a number of professionals-right from Vijay
Jindal in the mid-nineties to Goyal in 2001-but obviously none could
deliver the goods.
Perhaps, then, is it now time for the Chairman
himself to go, rather than his CEOs? Unfortunately, with Chandra
and his family holding on to 54 per cent of the company's equity,
there's no point answering that question since there's no shareholder
powerful enough to contemplate ousting the founder. ''Don't forget
that it is ultimately his money and his ego that are on the line,''
points out Dr Gita Piramal, Managing Editor, Smart Manager, who
believes that Chandra's huge stake will ensure that he doesn't run
it into the ground. But as Sanjeev Prasad, Media Analyst with Kotak
Securities, asks: ''Does he have the time?" Shareholders who
feel he doesn't may not be in a position to overthrow the management,
but they do have another option: To dump the stock.
A Pyrrhic Fizz
Fine, Coke's marketshare in India is growing.
But, at what cost?
|Coca-Cola India's Lex Von Behr: Another
think what Coca-Cola India (CCI) packs in its bottles is carbonated
drinks and water. But it transpires, the company actually gives
away money with every bottle it sells. Or so it seems. A little
over two years after its Atlanta-based parent was forced to take
a $374 million (Rs 1,683 crore in 2000 exchange rates) hit as a
result of cci's disastrous acquisition of bottlers, CCI has racked
up another Rs 400 crore plus in losses. It has reportedly sought
permission from the Delhi High Court to write off Rs 2,086 crore
in accumulated losses of its bottling subsidiary Hindustan Coca-Cola
Beverages (HCCB), as a prelude to its forced 49 per cent divestment
in HCCB to Indian investors. "This is just an internal adjustment
towards the divestment," a CCI spokesman told BT.
Unfortunately for CCI, the write-off comes
at a time when it has everything going for it in terms of the market.
Its two-year old Kinley recently dethroned the reigning king, Parle's
Bisleri, in the Rs 1,000-crore bottled water market. The year also
marked a resurgence in sales (up 26 per cent) of its bread-n-butter
carbonated soft drink brands in the Rs 5,500-crore market, and CCI's
entry into lower price-points with powdered soft-drink concentrate
(SDC) SunFill and its entry into hot coffee/tea with tie-up with
McDonalds India. Will the entry of Indian investors change things?