Home Trade's Agarwal: He had a fool-proof scheme with G-secs

SANJAY AGARWAL
Victim Or The Crime?
Home Trade CEO Agarwal made the news in 2002, for all the wrong reasons.

Now out on bail and awaiting trial, Sanjay Agarwal continues to be one of 2002's enduring mysteries. Baby-faced Agarwal, a MBA from Bombay Univ with dollar dreams in his eyes was an employee of Lloyds Securities, who bought the firm from the Gupta family that ran Lloyds when it wished to exit the business. Renamed Euro Discovery Technology Ventures first, and Home Trade next, the company entered the hyped up online securities trading business. Its ads, featuring Shah Rukh Khan, Sachin Tendulkar, and Hrithik Roshan created a stir, but business was slow. Which is where things begin to get murky. Agarwal had inducted an acquaintance from his Lloyds days, broker Ketan Sheth as a director on the board of Home Trade. At Sheth's prompting-the man dealt in government securities, G-secs-or on his own accord, Agarwal decided to get into g-sec trading. With a twist. The company would approach smaller co-operative banks or provident funds, look for a weak link such as a venal chairman, strike a deal with him, sell the bank or fund some G-secs, delay delivery, and, play the stockmarket using the money in the intervening period. Unfortunately, the market tanked, the company could not recoup its investments from the market to buy G-secs and deliver them. The scam came to light when a NABARD team inspecting the accounts of Nagpur District Central Co-operative Bank noticed that the bank had made huge investments in G-secs it didn't possess. Its chairman Sunil Kedar, it later emerged, was in with the Agarwal-Sheth duo all along. Some of Agarwal's former colleagues spoke out about his inability to orchestrate a scheme such as this; he wasn't, they claimed, smart enough. Victim or the crime, though, Agarwal, who was fond of the good things in life, saw everything go up in smoke in 2002.

-Shilpa Nayak

RAM NAIK
His Luddite Lordship
Petroleum Minister Naik almost killed the disinvestment process.

Petroleum Minister Naik: Nay-sayer

To 68-year-old Ram Naik, the union Petroleum Minister must go credit for stalling the government's privatisation process in its steps. Until he met Naik, the immovable object, Union Disinvestment Minister Arun Shourie had acquired a reputation as a unstoppable force. His plan to raise Rs 51,300 crore for the government from the disinvestment process in 2002-03 seemed achievable.

The Petroleum Minister has always been against the privatisation of public sector oil companies. In 1999 he declared them "strategic" and pushed a cross-holding proposal through Parliament-Indian Oil Corporation and ONGC picked up a 10 per cent share in each other, enriching the government's coffers, and assuaging any privatisation pangs it may have felt. In February 2002, he got IOC to bid almost double what the next highest bidder did to pick up IBP. Now he claims his opposition stems from the fact that public sector companies were funded by the public; ergo, he says, its benefits have to accrue to them. While the government has respected Naik's wishes-BPCL will be 'privatised' by selling its shares to the public-his victory isn't total. PSU oil major HPCL will go to the highest bidder. Even Luddites have limits.

-Ashish Gupta

Dhirubhai Ambani: A dream called Reliance

DHIRUBHAI AMBANI
Passing Of The Patriarch
Dhirubhai Ambani: 1932-2002

On December 28, the late Dhirubhai Ambani's 70th birth anniversary, the conglomerate the man founded launched its telecom service across the country-the biggest telecom launch India has seen. The scale of that launch was befitting of the Rs 65,000-crore Reliance Industries (Reliance Infocomm is a subsidiary). And the choice of the date was fitting too: wasn't it Dhirubhai Ambani, a school teacher's son from Chorwad who started it all? A hero on D-street, Ambani died on July 6, 2002, leaving behind a company that will almost certainly stand the test of time.

-Roshni Jayakar

M.S. Oberoi: Te father of hospitality

M.S. OBEROI
Goodbye Mr. Hospitality
Rai Bahadur Mohan Singh Oberoi: 1898-2002

The man who gave his name to a global hotel chain began his career in hospitality as an employee of The Cecil Hotel, Shimla. Twenty one years on, he owned the place, having acquired it from its previous owner, Ernest Clarke. And by the time he died, on May 2, 2002, he had grown it into a 37 hotel, 27 location (across seven countries, if you must know), Rs 750-crore empire. M.S. Oberoi hadn't been involved with his business for some time-his son P.R.S. 'Biki' Oberoi had taken over the reins in the late seventies. But his name, and the culture he fostered will prevail in the hotel chain he founded.

-Moinak Mitra

HSBC's Kidwai: In the thick of action

NAINA LAL KIDWAI
India's Most Powerful Woman
HSBC has a new rainmaker, Vice Chairman Kidwai.

Arguably the best-known Indian investment banker abroad, Kidwai moved from JM Morgan Stanley, where she was Vice Chairman, to HSBC as head of its investment banking operation. The first Indian woman to graduate from Harvard Business School can thank Fortune magazine for that-she has been a regular in its listings of the most powerful women in business. The 45-year-old Kidwai caught the public eye when she joined Morgan Stanley in 1994. She helped the firm forge a joint venture with Nimesh Kampani's JM Financial, and together, the duo grew the investment bank into the country's biggest. An expert in IPOs and M&As, Kidwai helped the bank rope in Wipro, Infosys, and Bharti as clients, and facilitated the Birla-Tata-AT&T cellular deal. HSBC must be hoping she can repeat that.

-Seema Shukla

Aamir Khan: The world is not enough

AAMIR KHAN
Can-do Attitude
India goes to the Oscars, thanks to the Khan.

Warhol was wrong. Fame doesn't always come in 15-minute packages; for actor Aamir Khan it came in a 222 minute one. That's the length of his home production Lagaan (Tax). Set in pre-independence India, the motion pic has a group of villagers taking on a British XI in a cricket match. The deal: if they win, they do not pay any tax for three years; and if they lose, they pay thrice as much. Improbable as the plot sounds, it struck a chord with masses in India and critics abroad, and managed to win an Oscar nomination in the non-English language category, a first for an Indian motion pic. It didn't win, but by then the world had discovered Bollywood.

-Shilpa Nayak

TVS Motor's Srinivasan: V for victory

VENU SRINIVASAN
Riding High
Thanks to Deming and Victor, it's victory all the way for Srinivasan.

Automotive CEOs are known to long for a year when they make a spectacular launch and win some kind of an award too. For TVS Motor's Venu Srinivasan, the wait has proved surprisingly short. In 2002, the 49-year-old CEO saw his newly launched four-stroke, 110-cc motorcycle, the Victor, effect a definite turnaround at his company, which on May 1, 2002 formally ended its joint venture with Suzuki. While Victor's booming sales is certainly something to cheer about, what must have added to Srinivasan's pride is the fact that the Victor was completely designed and developed in-house. Then, 2002 also saw TVS Motor win the prestigious Deming Prize for quality. Not just that, Sundaram-Clayton, Srinivasan's other company that already won the Deming Prize in 1998, went on to win the exclusive Japan Quality Medal-a club open only to the Deming winners. The problem with a busy year like Srinivasan's: 2003 may look pale in comparison-unless, of course, TVS Motor launches more victors.

-R. Sridharan

AZIM PREMJI
The Quiet Invader
Wipro's Azim Premji was the software domain's #1 raider in 2002.

Wipro's Premji: M&A time

He has got Rs 1,400 crore in his war chest and he is hungrier than ever. In the first nine months of 2002-03, Azim Premji's Wipro has acquired four companies-Rs 584 crore has gone into three, and due-diligence work is on for the fourth. In July, Wipro acquired Spectramind, India's biggest independent call centre for $90 million (Rs 432 crore) in an all-cash deal; in July, it snapped up GE Medical Systems it Pvt Ltd, for $5.73 million (Rs 27.5 crore); and in November, it acquired the energy management practice of American Management Systems for $26 million (Rs 124.8 crore). While the company has announced the acquisition of the R&D division of Ericsson, the valuation process is still not complete. India's software nobility-Wipro, Infosys, HCL Tech-has been talking the M&A language for some time now, but Premji's sudden burst of acquisitions in 2002 seems to have given it a clear edge over the competition. Clearly, Talk softly, but wield a big wallet is the man's motto.

-Venkatesha Babu

ARUN JAIN
Hostage Situation
Polaris' Arun Jain's earned the dubious distinction of being the first Indian CEO to be held hostage in an alien territory.

Polaris' Arun Jain: In deep soup

For Arun Jain, 2002 should have gone down in history as the year when he pulled off one of the biggest mergers (of Polaris with Citigroup's OrbiTech) in it services. Instead, a fateful November trip to a customer in Jakarta earned him a bizzare distinction. He became the first Indian CEO to be held hostage in an alien territory, that too by a pin-striped customer. It took top-level ministerial intervention to win his release. Just what happened? In June 2002, Jain's Polaris Software Lab signed a $1.3-million (Rs 6.24 crore) contract with Bank Artha Graha of Indonesia to implement its Bancware suite of software solutions. According to Polaris, the company started implementation work in August, but Artha Graha was unhappy and decided to cancel the contract in November, although the completion was due only in July 2003. Polaris says it contested the termination on the grounds that it was incorrect, and wanted to negotiate with the bank (there was a provision for arbitration in Singapore). Jain had arrived for the negotiations, when the bank decided to have him arrested. After 12 harrowing days, during which the vegetarian Jain had his and his colleague Rajiv Malhotra's passports taken away by Indonesian police, he returned to India, shaken but safe. The legal battle is on, but Polaris now plans to be more choosy about its customers.

-R. Sridharan

A.M. Naik: Suddenly, the job gets tough

A.M. NAIK
Testing Times
CEO Naik had to tread the fine line between the big and the small investors.

Takeover battles are never easy, but the one A.M. Naik was pitched into last year was particularly awkward. Consider this: For almost three years, Naik-CEO of the Rs 8,358-crore L&T-had been trying to demerge its cement division. In November 2001, the Ambanis of Reliance sold their 10.5 per cent stake in L&T to the A.V. Birla Group. A simple transaction, except that when the Birlas followed it up with an open offer for an extra 20 per cent of L&T, investors cried foul and SEBI stepped in. Investors were miffed that the Birlas were offering them only Rs 190 per share versus the Rs 306 they paid the Ambanis. SEBI, on its part, alleged that the Birlas-who get 30 per cent of the cement market with L&T-had stalled the demerger, which implied management control. How is Naik going to cope? We'll find out this year.

BILL GATES
Big On India
William H. Gates-anything to conquer.

Microsoft's Gates: He needs India

No one could have missed microsoft chairman and Chief Software Architect Bill Gates' four-day visit to India in November. He was everywhere-in the general papers; in the business papers; in vernacular publications; on the tube. If software is India's enduring obsession-it is-then Gates is its presiding deity. One day of the visit, the first, was dedicated to charity-Gates announced that the Bill & Melinda Gates Foundation would be spending around $100 million (Rs 480 crore) to help India fight the aids menace. The remaining three days were dedicated to business: meeting politicos who mattered, including a couple of Chief Ministers and the President; talking to CEOs about how technology, in general, and Microsoft, in particular could help their businesses; meeting with employees and customers; and playing the evangelist with the developing community, key to the company's continued dominance. If the visit had one overarching leitmotif, it must have been the importance of India to Microsoft. The country's huge developing community has a role to play in the acceptance of the company's .Net platform. Indian software services biggies like Wipro and Infosys could, by building applications and solutions on Microsoft's platforms, spread the Redmond giant's franchise. And the Indian government could, when it decides to it-enable itself, become the single largest customer, of any kind of technology product or service-one reason why Microsoft is open to sharing the Windows source code, a practice reserved for its biggest customers, with the government. Seen in the light of all these, the $500-million (Rs 2,400 crore) investment that Gates announced looks like chump change.