Grow up, Schwarzman

Stephen Schwarzman is a bad schmoozer. That’s a skill he’d rather have if Blackstone, the PE firm of which he is the CEO intends to do more deals in India. In particular, in sectors like media, telecom, real estate and energy where an FIPB approval is needed to relax statutory ceilings on PE investments.

Global private equity fund Blackstone’s proposed investment of $275 million (Rs 11.30 billion) in Ushodaya Enterprises, which runs the Telugu newspaper Eenadu and TV franchise, is stuck with the information and broadcasting (I&B) ministry seven months after the deal was announced.

This could mean trouble for the country’s largest private equity deal in the media space, which requires Foreign Investment Promotion Board (FIPB) clearance.

Arun Sarin of Vodafone learnt it the hardway. Indian politicians and bureaucrats are not so lightweights in that they have a reputation for jamming many a smooth deal. Equally important it is for him to be less of a gas bag afterwards.

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"Go, use the wisdom of Arun Sarin, Mr.Schwarzman..."

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You heard me, Mr.Sarin

Has it been a few hours since my last post cautioning Arun Sarin...? It seems he's heard me. Well, I won’t pretend modesty because that’ll be very unlike me. I had timed my hunch very well and might as well take some credit…

Never mind...the message has hit home. Arun Sarin of Vodafone has now come out with a retraction in response to a fuming B.K.Chaturvedi, the then Cabinet Secretary, who denies having been approached by any business house. Chaturvedi said, "India is no Banana Republic that we can give approvals in one day; it takes time and even if there were vested interests trying to scuttle the deal, what is the big issue. It happens everywhere; it is fine as long as we deal with it the right way, which is what we did."

In a subsequent message, Sarin has attempted some damage control by reasoning that his statement was directed not at *regulators* but at *vested interests*. The Anil Ambani Group, the Hindujas, Maxis of Malaysia and Essar had shown interest in the Hutch stake.

It’s o.k, Mr.Sarin… Common sense very often is one of the first casualties for rock star CEOs. And you are way up there…take care…!

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Not so soon, Mr.Sarin...

No matter how hard CNBC anchors may try to glorify businessmen, big business everywhere has its murky side. Arun Sarin of Vodafone had this rant at a Global IIT conference in San Francisco. Sarin while calling for more transparency in acquisitions was referring to some of his rival bidders - in $ 11 bn HutchEssar deal which vodafone had won - aiming to scuttle the deal using their political clout.

In May, Vodafone completed the acquisition of controlling stake in India’s Hutch-Essar from Hong Kong-based Hutchison Telecom International Ltd (HTIL). Indian regulations impose a cap of 74% for Foreign Direct Investment (FDI) in Telecom sector. There’s some confusion on the `Indianness' of a 15% slice held by HTIL’s partners and if upheld, would add up the foreign holding for Vodafone and Essar to 89 per cent – that is, violating the FDI cap.
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So get less vocal, Mr.Sarin….you aren’t completely out of the woods as yet...rivals could still be out there…