The Hindu Business Line : Better sell used cars than do asset-stripping

STORY so far: As I surf the Net, I stumble upon a shocking piece of evidence that showed how Jaanu was in a deep mess, with his clients either having collapsed or on the run.There was a stout liability claim, though tentative, that a foreign company with underworld links was trying to pursue against Jaanu. I guessed he was not even aware of the Damocles' sword.

Episode 14

As I entered the spacious portico of the star hotel, with uniformed attendants in the vicinity and potted plants at the edges, polished door handles and swinging doors, there seemed to be some melancholy in the air. I could well be imagining, what with the background music of Shehnai streaming in through invisible speakers, but the truth is that Osama Bin Laden's men have dealt a big blow to the hospitality industry by catapulting passenger planes into concrete matrices.

The industry thrives when there is a demand push to hike room tariff.

But, as things stood, if the hotel bosses want to maintain current occupancy levels — a useful measure of asset usage — the only option they have is to offer heavy discounts, under one pretext or the other. As if to compound the hospitality industry's woes, there is the glut in capacity.

Post 9/11, many tourists revised their plans and there were those unfriendly travel advisories given by the US — suggesting that India was on the verge of a war and so be careful.

It has become possible for some hotels to boast of a high occupancy rate only by lowering tariff and the net result was not too happy.

We have to feel only blessed that the Indo-Pak tension has apparently eased and there are more smiles going around, at least on the front pages of newspapers, and thousands of PIOs and NRIs are congregating for what is said to be the first major get-together of PIOs and NRIs who constitute the two limbs the Indian diaspora. It is explained, if you want to know, that those who hold Indian passport and live abroad now are NRIs.

So, it relates to recent immigration. Those who have migrated to other countries long ago and have been living there for generations are PIOs. And both of them are Bharatavamshis, a term that is new for most of us who know of only bharathanatyam or Bharatiya Janata Party.

With thousands of American troops, including the Marine units, heading towards the Gulf, as eagerly as soccer players lung towards the opponent's goalposts, there could be dark days ahead for the industry, I thought.

Well, the lobby is grand, with a chandelier providing soft light, sofas positioned to give ample sense of space, and I see Tarun in one corner, busy with a copy of Femina. Ah, these boys, I fret, but there are many ladies around in other seats, engaged in puffing away their cigarettes, and I have little to complain.

"Hi, Tarun," I sit opposite to him and drag his attention from some article he is reading about the ten beauty tips from a Bollywood star.

"Hello, Swati," he mumbles. "What'll you have?"

By then, a liveried bearer comes in to take the order. "Natural sweet lime," I say, eager to kick up some appetite before the main course starts in about an hour, I guessed. "Coke," he ordered, unthinkingly, because in my view he was already overweight by a few kilos for his height, and more coke would only accentuate his problem. But I was not here to advise him about his paunch.

"Show me your plans," I asked.

"First," Tarun started, "you're aware that I have retained one of the best consultants in the trade. He had advised Grosh Imm Ltd on the open offer about a month ago. A prestigious assignment he had told me. He earned a neat crore on that."

"That was a big flop," I pointed out. "Yell and Tee, the company that the Grosh chaps wanted to almost take over, stayed put, even as all white knights came to the rescue, in the form of SEBI, the media and so on. Don't forget the big dent it made on Grosh's gambit on governance."

"He had advised Ratan," Tarun said enthusiastically.

"Oh, you are talking about how Ratan misdialled the telecom company," I replied. "And the minister had to intervene. Don't you remember that backtracking Ratan had to do?"

"Just because you work for the old man, you are trying to talk me out of my ambition," Tarun was getting annoyed.

"If only you cool down a bit and see the situation a little more dispassionately, as you can easily do in an expansive place like this,"

I told him calmly, "you would realise, Tarun, that you are not really cut out for this company's culture. Something that my chief has been nurturing over the last several decades. Also, you won't be able to muster the hundreds of crores that would be required if you wanted even a marginal stake in my company. To be honest, it doesn't need much intelligence to watch soccer, down cokes, drive a car and generally ride on a relative's goodwill. And, instead of emulating some of the less respected takeover tycoons who made brash and hostile takeover bids that ultimately fizzled into blatant asset-stripping, you would be better off doing used car business."

"To be frank, Swati," he said, "I had that idea till about last week. How could you guess so correctly?"

"I mind read," I said, "which tells me you are right now thinking about the dinner."

"You're right," he rose. "Let's go."

(To be continued)

Swati_CA@hotmail.com

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