It's time SIEMENS relocate to India

Poor SIEMENS. It just got unlucky.

Too much is made out of a bribery scandal. What did it do after all? It ran a cash desk for its managers to draw money at will and offer kickbacks to get deals. Over time, they say it added up to $800 million or so. So what? Didn’t late Dhirubhai Ambani (and now his sons) build the Reliance empire by bribes? The Ministers do its bidding in the Parliament. They fight its war. Even as RIL (led by Mukesh Ambani) backtracks on its earlier agreement to sell gas to RNRL (led by feuding brother Anil Ambani) at concessional rates, Murli Deora, the Minister for Petroleum and Natural gas will force his bureaucrats to file an affidavit to help beef up the RIL case. The bureaucrats in the government where Reliance had something to do get two pay checks every month. A smaller one from the government and another one much larger from Ambani’s cronies. In return, they let Reliance import capital equipments at `NIL’ rate of duty by accepting its classification as `gift’ – yes, gift of an entire plant by an overseas supplier and more.

But that’s in India. In Europe and America they look down upon corruption. They won’t let companies get away with bribed deals. They are grilling SIEMENS and imposing massive penalties. But a Bernard Madoff type $50 billion ponzi schemes are allowed. Their investment banks are allowed to issue junk bonds that have little or no underlying asset that have the power to bring down their economies. [Hell the serial collapse of Wall Street banks looked like some Communist government issuing a “shutdown-or-else” diktat to free up pricey real estate – like they do in China pushing the poor people into hinterlands to make room for Olymipic stadium and other urban infrastructure. They let their auditors, credit rating agencies and regulators get away scot-free. Even Governors can sell senate seats and the courts don’t allow their removal.

.
Hypocrisy? Well, ok for lack of a better word.

.

I have some advice for beleaguered SIEMENS management – Relocate to India. You have all the right qualifications :-)

.

The McKinsey Annuity

Global consulting firm McKinsey advises businesses and usually gets paid. It might as well be its first, having to move the Bombay High Court against two of its big ticket clients [Reliance Industries (RIL) and Reliance Communications (RCom) ] for non-payment of its bill - in this case a fee of Rs. 270 million ($ 6.7 m). As events went, after patriarch and founder Dhirubhai Ambani’s death, the Reliance group had split right down the middle between the two feuding sons' camps in June 2005. Elder son Mukesh Ambani got Reliance Industries (petrochemical, oil and gas businesses), younger Anil settled for the group’s power, telecom and financial services businesses. McKinsey had signed an agreement back in 2001 with RIL before the split, to roll out RCom.

The terms had also offered McKinsey some top ups if RCom revenues were to cross the high watermark of Rs 10,000 crore ($2.46 b) which it did last year. But when McKinsey presented its claim to RCom, it refused payment stating that the deal was between RIL and McKinsey and RCom is not a party to it. Neither would RIL pay up since RCom has since been spun off and now it belongs to the Anil Ambani camp, with which it stands daggers drawn on several issues.

Tricky situation for McKinsey. So it will be for the High Court Judge too, I guess. Further the $ 6.7 m Mckinsey bill also looks more like a milestone based annuity to me…

.

Won’t be surprised if the Judge refers it to Insurance Regulator for fairness opinion…!

.

Between an SEZ here and an SEZ there…in China

When the people of Uttar Pradesh elected Mayawati’s BSP with a thumping majority (overthrowing Mulayam Singh’s Samajwadi Party), her first item in the agenda for governance was a given – review all SEZ cleared by the Mulayam Singh, the former Chief Minister of the State.

In one of its most significant decisions since assuming power, the Mayawati government in UP has announced its intention to refer the allotment of 1,200 acres of land to Reliance Anil Dhirubhai Ambani Group for setting up an SEZ, to the Union government for review.

I also had a lookback at Nandigram riots in West Bengal (over Tata's SEZ) where the Left rules – for several decades now.

I was reading Vinnie's post on instant Chinese cities (Thanks Vinnie, for the pointer) and felt a bit wistful. How long would it take for our people to learn from our enterprising neighbors?

Excerpts from NatGeo article -

“In 23 minutes, they designed an office, a hallway, and three living rooms for factory managers. On the top floor, the workers' dormitories required another 14 minutes. All told, they had mapped out a 21,500-square-foot (2,000 square meters) factory, from bottom to top, in one hour and four minutes. Boss Gao handed the scrap of paper to the contractor. The man asked when they wanted the estimate."How about this afternoon?"

The contractor looked at his watch.

It was 3:48 p.m.

"I can't do it that fast!"

"Well, then tell me early in the morning."

That’s how they do it in China. We bloody well understand and fast…

.