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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (2032)	7/29/1998 11:43:00 PM
From: JEFF CHAPMAN	Read Replies (2) \| Respond to of 12475

Interesting article on multinational backlash in India: (COMTEX) B: Hindu hardliners aim to drive multi-nationals out of Indi B: Hindu hardliners aim to drive multi-nationals out of India by Abhik Kumar Chanda NEW DELHI, July 29 (AFP) - A right-wing group with links to India's ruling Hindu nationalist party Wednesday said it would launch a nationwide campaign to "liberate" the country from multi-nationals. The Rashtriya Jagran Manch (National Awakening Forum) said the seven-day programme, ending on the 51st anniversary of the end of British rule on August 15, would be the start of a prolonged battle against foreign firms. Manch convenor Murlidhar Rao told AFP the underlying theme of the campaign, called the MNCs Quit India programme, was based on the concept of "swadeshi" or economic self-reliance espoused by independence hero Mahatma Gandhi. "MNCs are monopolising all our production systems and are a symbol of the colonial period," Rao told AFP. "We want to put a stop to this. "Our purpose is not to throw them out by force as such but to force the government to develop Indian industry so that they just have to leave," he said. "We want to make people aware of the perils of neo-colonialism." The Manch said the campaign would include street protests, demonstrations outside multi-national offices and production units and street plays. But he said it would exclude violence as it was severely condemned by Mahatma Gandhi. Rao said the worst offenders were US firms PepsiCo Inc., Coca Cola and MacDonalds, accusing the firms of having brought "rubbish into the country". But he denied his organisation was responsible for a spate of attacks on Coke and Pepsi trucks and parlours of US ice cream giant Baskin Robbins. "Our organisation is interested in generating awareness and for this we are using these companies as symbols. "In times of extraordinary events, people get surcharged. And if they burn a truck you cannot form a generalised opinion that (we) preach violence." The Manch is a front for a hardline Hindu group closely linked to Prime Minister Atal Behari Vajpayee's Hindu nationalist party. The forum was set up in 1991, the year India opened its markets after four decades of protection. Rao said 1991 -- which brought in global brands such as Mercedes Benz, Benetton, Pierre Cardin, Rayban and Pizza Hut -- was "the worst thing to have happened to India." He said the anti-MNC programme would be intensified during a two-week campaign ending on October 2, Mahatma Gandhi's birthday, and target "millions of people". "We will move to villages and towns, hold protests everywhere and make the people see the light. Once they realise that foreign companies are exploiting us -- they are not creating enough jobs, they are repatriating profits and encouraging Western-style consumerism -- they will stop buying." The Manch's taboo list covers goods ranging from soaps to consumer items and includes brands such as Pears soap, Colgate toothpaste, Cadbury and Nestle chocolates and products made by Philips, Sony, Revlon and Whirlpool. Vajpayee has been critical of the protests, saying: "Some people are breaking Coca Cola bottles. What do you achieve by breaking bottles? Only another kind of liquid flows from such a programme -- blood." But Jay Dubashi, a key economic adviser in Vajpayee's party, said he partially backed the campaign. "I totally agree that we need to draw a line between computer chips and potato chips. We need to stress that foreign capital and technology is welcome in crucial sectors like infrastructure but not in capital goods. "However, a total reversal is not feasible. Globalisation is here and seems here to stay." ach/tl/pch * end of story * BTW, I got this story from mytrack.com's software which is free and can be downloaded here: mytrack.com If you do sign up for this (you get Comtex newswires around the clock on markets around the world plus Marketguide reports for free, with news/quotes/ticker in 'pushed' streaming format), please put 'Muthavugah' in the referred by field...

To: Mohan Marette who wrote (2032)	7/30/1998 1:22:00 AM
From: djane	Respond to of 12475

India Embraces the Hostile Takeover global.forbes.com India's other war By Gaurav Dalmia, August 10, 1998 India's recent nuclear tests have diverted attention from a different and much more positive kind of aggression now on the rise inside the country: the hostile corporate take over. In recent months India Cement has successfully completed a hostile acquisition of old line Raasi Cement. A group of predatory businessmen with interests in tobacco and automotive distribution is attempting to unlock value by taking over Saurashtra Cement, another poorly performing cement company. Meanwhile, Sterlite Industries, a leading copper company, tried to wrest control of the big aluminum producer Indal, which is currently controlled by Canada's Alcan. India has seen more hostile bids in the past year than in the preceding decade. What's going on? Several forces have suddenly come together to create a favorable environment for hostile takeovers-and shareholder democracy. Traditionally, Indian businesses, typically family controlled, listed their stocks on the country's stock exchanges rather prematurely. Some continued to run the businesses as if they were the families' private fiefdoms. Many families control their empires with holdings of just 25% or even 10%. In this they have been aided and abetted by government owned financial institutions which used their near-monopoly position as a supplier of capital to cheaply build large equity stakes in many large companies. As extensions of the government, these financial institutions were not subject to market forces. They almost always supported incumbent management, generally to the detriment of passive public shareholders. Economic liberalization is changing all that. Mediocre managements are no longer able to make handsome returns by sitting behind barriers to entry. Also in the last few years, many banks and other financial institutions have been privatized. These institutions are demanding performance and are the new change agents. At the same time, public shareholders who previously had no choice but to tolerate incompetent managements are now welcoming offers from predators. In some large companies, individual family members who have fallen out with each other are trying to woo shareholders and take over management control. In addition, the current drought in the stock market is throwing up attractive valuations even for well-managed firms, who, under current regulations, cannot buy back their own equity. While India does not-yet-have a Michael Milken or a Henry Kravis, greenmailers and white knights are growing in number and in social acceptance. Many smart businessmen, typically not members of India's business elite, are regularly approaching financiers with ideas to profit from this wave. Thus does the hostile takeover movement gain momentum. All this is putting some serious money in the pockets of many a long-suffering passive shareholder. One example: After India Cement made a bid for Rassi Cement last December, Rassi's stock moved from Rs48 a share to Rs232-a five-fold increase over a five month period. Fighting to control assets will have a deep and lasting impact on India's economy. As it has in the U.S. and, more recently, in Europe, so in India the fear of hostile takeovers is focusing attention on the productivity of capital. To enhance shareholder value, managers who were biased toward heavy industry and hard assets are now turning their attention to intangibles such as brand names and distribution networks. Conglomerates have bought into the concept of core competence; unprecedented and industrywide rationalization and consolidation is transforming Indian business. Stock option plans and other incentive compensation schemes are suddenly in vogue. Amidst this turbulence, many Indian companies are now building world-class businesses. Reliance Industries boasts the most dynamic management team and has evolved from an efficient rent seeker to an efficient low-cost petrochemical manufacturer. In a boring business of boilers and capital goods, Thermax has carved a formidable position for itself, with earnings growing at 20%. Essel Packaging has played the consumer boom indirectly and become one of the world's largest collapsible-tube and laminate companies. NIIT has built a billion dollars in market value in the past 16 years by focusing on computer education franchises and software development. Each of these companies deserves the global investor's serious consideration. New Dehli-based Gaurav Dalmia is a Director of the Dalmia Group, a leading Indian conglomerate. E-mail is gdalmia@hotmail.com c 1998 Forbes Inc. Terms, Conditions and Notices