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Business
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An open letter to Ratan Tata
Dear Ratan Tata,
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 This humble hack dares to be presumptuous enough to write with trepidation and a certain gumption that would hardly ruffle the feathers of a mighty and towering giant of an entrepreneur whose companies have been on a quest of global conquest in the last few years; albeit without the marauding violence and contempt displayed by the rampaging armies of George Bush Jr. I marvel at the vision, stamina, will power, fortitude, leadership skills and chutzpah you must have to manage a group with about 80 companies. I was an even more ardent admirer of your predecessor the late J.R.D. Tata.
Like all hacks, I was going through
a bunch of newspapers the other morning when I stumbled upon this headline: “Tata Seeks Special Funds in Banks.” Like most hacks, I was curious; wondering if the mighty Ratan Tata now wants to buy up a bank or two after gobbling up Corus, Jaguar and Land Rover.
After reading the story, I must admit
I was puzzled; you may say even baffled and bamboozled. The question kept ringing in my humble head: the mighty Ratan Tata, the great global entrepreneur, the saviour of India Inc. and India, now going to the government with a
hat in hand?
It seems you have found some time from your maddeningly busy schedule to write a letter to the humble Dr. Manmohan Singh. He must have felt elated because he was dejected when Barack Obama didn’t call him. In the letter, you have taken up the responsibility of saving the brightest jewels of India Inc. from distress and even disaster. In keeping with the Tata tradition of corporate ethics and social responsibility that was so exemplified by J.R.D. Tata, your mission is selfless and charitable. You want ‘select’ Indian banks to create a special contingency fund for ‘credit-worthy’ Indian companies. And what would that fund do? It would rescue allegedly top performing and leading ‘credit-worthy’ companies from despair, if the dollar and euro loans they have taken are recalled or have to be repaid in a hurry. That is because the global financial meltdown might compel many foreign banks and institutions desperate for liquidity to refuse to extend or roll over the loans after December 31, 2008, when they close their books of accounts. Visionary leader that you are, you have chosen to be pre-emptive and pro-active in saving the honour, the very izzat of ‘credit-worthy’ Indian companies and entrepreneurs. Entrepreneurs that are not considered ‘credit-worthy’ by you have no izzat anyway.
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 I don’t know if this humble missive will reach 10, Janpath or if Sonia Madam will even read it. But I hereby nominate you for the next Bharat Ratna for your pioneering efforts to save corporate India. Your efforts are so refreshingly different from the controversial actions of Vijay Mallya and Naresh Goyal, who have acquired a nasty habit of going hat in hand to the government. After announcing global conquests a la Vasco da Gama through Kingfisher and Jet, the duo have now hunkered down and want a series of bailouts from both the government and the consumer. (As a frequent flyer, you might have heard of how consumers are bailing out Mallya and Goyal by paying through their noses for air tickets). You are also so refreshingly different from the likes of Rahul Bajaj who claims to bat for India Inc. by allegedly asking for more protection from foreign competition.
Mighty sir, I also want to apologise for words written two years ago in our sister publication Business & Economy. At that time, I had the temerity to suggest that the Tata Steel takeover of Corus (hailed by many in the media as the reverse of East India Company) will saddle your company with unmanageable debt. The temerity transformed into untrammeled insolence when this humble hack suggested that the double whammy of a falling rupee and falling demand and profitability for steel could lead Tata Steel to an unprecedented crisis. When you took over Corus, the rupee was about 40 to a dollar. Now, it is about 50 to a dollar. So the $6 billion odd loan that you took for the Corus takeover seems an even steeper mountain to climb now. Of course, your letter to the Prime Minister has nothing to do with this niggling doubt about the future of Tata Steel. It has also nothing to do with fears that foreign institutions might recall loans. The letter is purely selfless. And really, how does it matter that the debt-equity ratio of Tata Steel increased from 1:1 in 2006 to 2.74:1? Only the cynics will say that a mighty entrepreneur like you will worry about these trivial matters when you are on a noble mission to save India Inc. And I will be the last one to suggest that Fimamce Minister P Chidambaram imposes a five per cent duty on steel imports to protect domestic players from global dumping, as steel prices crash has anything to do with the future of Tata Steel.
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