Nusli Wadia (L) & Sunil Alagh: Severed ties

Good Day, Mr Alagh
Sunil Alagh's ungainly exit from Britannia Industries was easily the most high-profile CEO sacking.

What do Ravi Deol, Ram S. Ramasundar and Apoorva Purohit have in common with Sunil Alagh? Easy question actually: all of them one fine day suddenly found themselves relieved of their duties as heads of their respective businesses (Deol from Barista, Ramasundar from Electrolux Kelvinator, Purohit as Head of Zee's programming. Purohit's exit from Zee was the least surprising, of course, considering the rather short distance many of her predecessors covered at Subhash Chandra's channel. Easily the most surprising of exits was that of Sunil Alagh, CEO of Britannia Industries since 1993.

We'll skim over the lurid allegations that were strategically leaked in the press, but the short point is that Alagh got the sack because he allegedly was on an expenditure binge since 1994-95, a chunk of which (Rs 3.64-odd crore) wasn't approved by Chairman Nusli Wadia. The official reason, as doled out to the stock exchanges was that Alagh "breached the trust and confidence...reposed in him by the Chairman and the Board of Directors...".

This line of attack isn't the most convincing, and many observers did look at the entire episode as a witch-hunt. After all, what was the board and the auditors doing for all these years when Alagh was supposedly in the midst of his spending orgy? Meantime, the Britannia board did think it prudent to appoint an independent firm, C.C. Choksi, to undertake an independent examination of the relevant papers and material. Whatever they find, it's clear that in the days head, fewer eyebrows will be raised when CEOs are shown the door. The days of longish five-year stints can also no longer be taken for granted, and CEOs will have little time to settle down and enjoy the perks of the top position. The mantra today is: Perform or perish. It isn't called a hot seat for nothing.

Fake Stamps, Real Scam
Telgi's dream run comes to an end.

Abdul Telgi: He is not going down alone

Although abdul karim telgi was declared a proclaimed offender in 1996, the real scam (involving politicians and high-profile police officers) came to light only in 2003. He was selling fake stamps via a network of official stamp vendors, and had made inroads into 14 states.

Telgi-and the ever increasing number of heads that have begun to roll along with his-may be the devious brain behind this ingenious scam, but the larger issue is the lacunae in the country's tax collection system. Instead of using a 100-year-old system to collect taxes, state governments would be better off collecting the stamp duty directly from users, using existing banking channels. This system (direct payment and franking the documents) is already in use in property deals. Stamp duties should also be rationalised. For example, the small denominations (like Re 1 revenue stamps), where the collection costs are more than the revenue, could be done away with.

Meantime, the sordid saga promises to continue in 2004, with Telgi taking some more big names down along with him.

-Narendra Nathan

Samir Arora: Will the charges stick?

SEBI Cracks The Whip
The regulator gets tough on insider trading.

SEBI is a favourite whipping boy, but in 2003 you couldn't accuse Chairman G.N. Bajpai of inaction. First the regulator hauled up Samir Arora, former Chief Investment Officer of Alliance Mutual Fund, for manipulating stock prices and insider trading, and promptly banned him from the market. SEBI capped that by banning yesterday's hot-shot broker Ketan Parekh for all of 14 years.

Some of the charges against Arora aren't too convincing. That he failed to inform companies when the investment crossed the 5 per cent limit (this is the duty of the compliance department and not fund manager) and that he tried to spook the sale of Alliance Capital are the best examples of this.

But the charge that his selling of Digital Global shares just before the announcement of the merger ratio was based on inside information, is serious. But here again, will SEBI be able to get enough proof to nail Arora?

-Narendra Nathan

MNCs Feel The Heat
Some of the biggest global brands came under fire.

The swadeshi brigade may have lost its teeth in Global India Inc., but that doesn't mean the MNCs are the poster boys of Indian business. Far from IT. Since Coca-Cola and IBM were forced to leave India after a sustained campaign against them in the 1970s, the year 2003 would have been the worst year for India's transnationals.

In February 2003, Delhi's fiery NGO, Centre for Science and Environment (CSE), brought out a test report, which said that pesticides were found in most bottled water, including Coke's Kinley and Pepsi's Aquafina. The cola-makers promptly announced they were sprucing up their bottling plants. Four months later, the CSE targeted the soft drinks, alleging that the pesticide content in them was about 30-36 times that of European Union norms. The subsequent months saw less and less people gulping soft drinks-which resulted in an estimated sales drop of Rs 120 crore.

In October, worms were found in Cadbury chocolates. The British MNC had to quickly announce a new packaging system for its chocolates and a "Project Viswas" to win the trust and confidence of the consumers back.

-Sahad P.V.

Bollywood Turkeys
The year was littered with flops.

The year just gone by had plenty of hype and hoopla in the guise of Bollywood's 'big banner' releases. It also had its fair share of flops. Trade magazine Film Information's Editor Komal Nahata picks the Abhishek Bachchan-Lara Dutta starrer Mumbai Se Aaya Mera Dost as the year's biggest turkey. The film, produced by Vishal Nihalani is estimated to have cost a little under Rs 10 crore and is believed to have recovered no more than Rs 3-4 crore for its makers. Turkey No. 2 would be the Kareena Kapoor-Fardeen Khan starrer Khushi, which is estimated to have lost some Rs 4 crore. Another high-profile loser was Main Prem Ki Deewani Hoon. The honours for the most high profile flop of the year, however, must go to the Kaizad Guztad-directed, Ayesha Shroff-produced non starter Boom. Neither Amitabh Bachchan's yak haired wig nor supermodels Madhu Sapre and Katrina Kaif's risqué outfits (if they can be called that) could save this film.

-Priya Srinivasan

Phaneesh Murthy: Accused again

Sex And The Cityslicker
Now you could, and should, be in trouble for making those ''innocent'' innuendos.

The one-time blue-eyed boy of Infosys and now CEO of iGate Technologies, Phaneesh Murthy, thought his troubles were over when in April his former employers reached an out of court settlement for $3 million with Reka Maximovitch under which she would drop the sexual harassment charges against him. Infosys and its insurers picking up the tab. But lightning struck again, with a vengeance. Within days of his taking over as CEO of iGate, a certain Jennifer Griffith decided to file sexual harassment charges against Murthy, who duly rubbished them as 'baseless' and 'motivated by greed' and also vowed to fight the case.

The second big-ticket case of 'alleged' sexual harassment pitted Coca-Cola marketing whiz Shripad Nadkarni against one-time Miss Universe and now Bollywood actress Sushmita Sen. Both parties have clammed up since, and hopefully Nadkarni won't face the same fate as Murthy (of lightning striking twice). Retired Justice S.P. Barucha has been appointed the arbitrator between the two parties, but Sen has probably already made her point with the reported Rs 1.45 crore she received from Coke.

-Kushan Mitra

Bribe Tribe
A minister gets caught taking money. Result? His party goes on to win an election.

Dilip Singh Judeo (L) & Ajit Jogi: Caught!

Money is not god, but i swear on God that it is no less than God.'' That's a translation of the line with which former Union Minister for Coal and Mines, Dilip Singh Judeo, one-time Raja of Junagarh (in Chattisgarh), allegedly swallowed a bribe on the eve of the assembly elections in four Congress-ruled states. Judeo put in his papers. Days later his party, the BJP, duly won a clear majority in the Chattisgarh assembly. A few days later, Chattisgarh CM Ajit Jogi was thrown out of the Congress party after he was charged with offering a bribe to newly- elected BJP legislators. The pm moaned that the entire episode had sullied Indian politics. India Shines!

-Kushan Mitra

G.N. Bajpai: Keeping a close watch on mutual funds

Can You Trust Your Fund?
It isn't time to panic yet, but keeping a watch on your MF will help.

Pre-2003 it appeared an unlikely question, and only a hardboiled cynic would have thought of popping it. But today mutual funds in the West are looked upon with extreme suspicion after a number of funds got embroiled in a series of scandals. These include marquee funds run by the likes of Janus and the Bank of America, which are being investigated by the New York Attorney General for allegedly allowing big institutional clients to trade their funds after market hours. To be sure, regulators in the US have been working overtime, filing suit after suit against companies over mutual fund pricing and trading. One such firm Prudential Securities, for instance, was targeted for its apparent failure to supervise brokers in its Boston office, who arranged for customers to make improper trades. Clearly, the myth that mutual funds are the safest way to grow your money has been well and truly shattered. Back home, not too many scandals have emerged out of the closet, but late trading and insider trading aren't exactly unheard of. The good news is that the goings-on in the US are a good warning signal for Indian funds to clean up their act.

-Brian Carvalho

Small Victory
They got Saddam, but has the US really won the war?

George Bush (L) & Saddam Hussein: Time for introspection

They finally did get him-exactly how the world might never know-but nine months after George Bush launched his onslaught on Iraq and Saddam Hussein, you have to wonder: Was it really worth it? The US and its motley crew of allies have finally caught the ace of spades (Saddam's picture was on the top in a bunch of cards the US supplied to its soldiers), but this victory has come at a considerable cost of money, resources, and lives.

According to the US Department of Defense, military operations in Iraq, which lasted till April-end cost an estimated $12 billion. Add to that the cost of transporting troops and materials to the West Asia and the cost of transporting these back, the war itself cost an approximate $26-28 billion. Unfortunately, for the US, the war just did not end on the day (May 1) when President George W. Bush announced the cessation of major military operations. The war and the ongoing occupation has cost the US over $90 billion already and will soon exceed $100 billion (if interest costs are factored in). This is not counting the costs incurred by the coalition partners. None of these numbers anywhere include the so-called 'cost of rebuilding' Iraq, which could well be another $100 billion.

The US had lost (by the time BT went to press) almost 475 soldiers since the war began on March 19, 2003. Over a quarter of these losses have been in non-combat related missions. Other countries, (UK, Spain, Italy, Japan, etc) have lost over 80 personnel in Iraq. The wounded count stands at almost 2,700 for the US alone. Add to that the conservatively estimated 10,000 Iraqis who have lost their lives...

Factor in also the loss of credibility: Where are those weapons of mass destruction?

-Kushan Mitra

Severe And Acute
In these times, crisis can strike in any form.

Remember SARS? No, it doesn't expand to "single and really sexy", as one nurse in Singapore apparently chose to interpret it at the height of the crisis. The Severe Acute Respiratory Syndrome-thank you, World Health Organisation-however was no laughing matter, hitting many South East Asian economies where it hurts most. That's the power of the virus, which resurfaced last fortnight in Taiwan just when the rest of the world had succeeded in eliminating SARS from its lexicon.

More than the actual victims claimed by SARS, threatening to cripple economies was the fear of the virus, which was resulting in delays in, if not outright cancellations of, investments. Industries that were impacted directly include tourism, hospitality, and the airlines. The fear of SARS may no longer exist, but much of the damage is already done: The WTO, for instance, is believed to have reduced its forecast of world trade growth in 2003 from 3 per cent to 2.5 per cent because of the SARS factor.

India mercifully proved immune to the SARS virus-the WHO declared India SARS-free-but that didn't mean the domestic economy wouldn't at least catch a cold. Not only did millions of dollars of trade with Singapore and Hong Kong get hit, but India's exports to the West also took a beating as most shipments are routed via the Far East, what with Singapore and Hong Kong being the hub of international trade.

To be sure, SARS wasn't just a Far Eastern phenomenon, what with even the US economy, which looks to South East Asia in no small manner as an export base, taking a few knocks courtesy the virus. Just when the world was beginning to breathe a lot easier post-September, Taiwan got a rude reminder about the existence of the SARS virus. Hopefully, there won't be any more in 2004.

-Brian Carvalho