Showing posts with label corporate. Show all posts
Showing posts with label corporate. Show all posts

Wednesday, May 20, 2020

A Company and its Loot



Four soldiers in four different uniforms. Look closely and you may find that it is the same soldier, standing ramrod erect, is serving as a model for different sets of coats, caps and trousers. In all probability he was from a village in present day Tamil Nadu, Telengana or Kerala, who was drilled and trained in Madras, and sent to fight battles at Plassey, Buxar, Pathargarh or Assey.

What did he do with all the money he earned from the British East India Company (EIC)? What stories did he tell his grandchildren of his long marches and battles across north India? Of cavalry charges blown to smithereens, of cities raped and plundered for his EIC officers? We may never get to know stories of the men who actually transformed India but William Dalrymple's latest book will certainly change the way you've understood Indian history from school textbooks and Amar Chitra Kathas.

The Anarchy is about the "Relentless Rise of the East India Company". It is also about bursting myths  and stereotypes; looking at the larger picture on the chessboard of Indian political economy, and reminding ourselves about the price we paid for our insular stupidity and internecine conflicts for  about two centuries.

The numbers are staggering. In 1500s India had a population of just 150 million (less than that of just Uttar Pradesh today!) - a fifth of the world's total -- and it was an industrial powerhouse, a world leader in manufactured textiles. In the early 1600s India was creating 22.5% of world GDP. England then had just 5% of India's population and was producing just under 3% of world's manufactured goods. Between 1586 and 1605, European silver flowed into the Mughal heartland at the rate of 18 metric tons a year!

And then wealth - gold, silver, youth, talent - started flowing in the opposite direction, gradually increasing pace over a century until the whole county had been reduced to a basket-case by 1947.

We may never get to know about the life and times of the farmers, weavers and foot-soldiers on whose backs the British looted India, but life of the 16th Mughal emperor, Shah Alam II gives us an idea of the chaos and turmoil that transformed the country into a basket case -
"He was now in his seventy-seventh year. As a boy he had seen Nader Shah ride into Delhi, and leave carrying away the Peacock Throne, into which was embedded the great Koh-i-Noor diamond. He had escaped Imad-ul-Mulk's attempt to assassinate him and survived repeated battles with Clive. He had fought the Company at Patna and Buxar, awarded the Diwani to Robert Clive at Allahabad and defied the Company with his cross-country trek back to Delhi. There, with Mirza Najaf Khan, against all the odds he had nearly succeeded in rebuilding the empire of this ancestors; only to see it vanish like a mirage after the premature death of the last great Mughal general. Finally, at his lowest point, the Emperor had been assaulted and blinded by his psychotic former favourite, Ghulam Qadir (Rohilla)."
While this book takes us through the changing fortunes of individuals and nations, I found a few things really remarkable -

* Maratha Resilience: The fighting units created by Shivaji perhaps stood the best chance of taking over the mantle of the Mughals - especially after having quickly dominated much of North and East India. Despite the terrible defeat at the Third Battle of Panipat (~36,000 dead in one day!) they bounced back to defeat the Jats, Rajputs and Rohillas, and yet , when it really mattered, the Peshwas, Holkars and Scindia's kept squabbling amongst themselves and failed to unite against a common enemy.

* Forts and Battles: Many of the key battles were won by a whisker - especially the historic ones at Plassey and Buxar. But there were many others that barely find mention in our history books, especially -
  • The Battle of Udhwa Nala (1763) where Mir Qasim tried to take a stand against EIC, and the capture of a PoW from a raiding party led to a surprise counter-attack...and the slaughter of over 15,000 defenders.
  • The Battle of Pathargarh (1772): 10 years after the Rohillas ditched the Marathas and sided with the Afghan invader, Admed Shah Abdali at the Third Battle of Panipat, the Marathas took their revenge at the Pathargarh Fort. Its amazing to know that among the captives at this fort were Maratha women captured a decade later at Panipat!
  • Battle of Talegaon (1779) - EICs first major defeat against the Marathas which led to the humiliating Treaty of Wadgaon.
  • Seige of Aligarh (1803) - EIC against Marathas and Rajputs who had been sold out by their own mercenary French commanders.
  • Battle of Assaye (1803) - The last of the great decisive battles between the Marathas and the EIC

* Naga Ascetic Warriors: It is surprising to know that more than 6000 naked Naga ascetics fought for the Nawab of Avadh as shock troopers!

* Mercenaries: There were scores of French mercenaries who helped modernise rival armies in India, from Tipu's Mysore to Madhaji Scindia's Marathas, but the most ruthless of them all was perhaps the Germany mercenary, Walter Reinhardt Sombre, the general who deftly shifted loyalties to the highest bidders. His widow, Begum Sumru, too carried on the game of switching loyalties from Mir Qasim to Shah Alam, from Marathas to the British.

* Moneylenders: If it were not for the Marwari moneylenders, and their networks, led by the Jagat Seths the Company simply would not have been in a position to afford the wars. With each small victory in the battlefield and the display of European armament technology and discipline, the Seths abandoned the local kings for the foreign merchants who had a better repayment record.

Ultimately its money that did the talking!

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REFERENCES & LINKS

* ToI (2011) on Pathargarh Fort - https://timesofindia.indiatimes.com/blogs/HiddenHeritage/when-monuments-go-missing/

* Shejwalkar, TJ (1946): PANIPAT, 1761 - http://library.bjp.org/jspui/bitstream/123456789/2488/1/Panipat-1761.pdf

* Najib Ud-Daula - The Rohilla chieftan who allied with Ahmed Shah Abdali to defeat the Marathas at Panipat (1761) - https://en.wikipedia.org/wiki/Najib_ad-Dawlah






Sunday, August 13, 2017

Promising the Skyscrapers: Jaypee's Corporate Debt Burden

There was a showdown yesterday in our neighborhood yesterday. About 4000 homebuyers staged a protest against the Jaypee Group for its failure to deliver their apartments on time.

The anger and rustration of homebuyers is undertandable. Having been promising a "Wish Town" with sprawling lawns, gold courses, playgrounds and various other amenities , and having invested  their life savings to buy a home of their own, they are now being left in the lurch. Apartments that were to be handed over in 2011 are still undelivered. Across the expressway, a vast array of unfinished apartment complexes can be seen on the horizon -- empty shells of brick, cement and concrete, with no sign of life, or work-in-progress.

A number of protests have been taking place from time to time. The last one led to a blokage on the expressway, and this one was aparently triggered by a decision in the High Court. The Allahabad bench of the National Compaly Law Tribunal (NCLT) admitted IDBI bank's insolvency plea pertaining to Jaaypee Infratech. The company had failed to repay a loan of INR 8500 Crores (USD 1.3 billion).

Behind the anger and frustration of the homebuyers is the larger picture of Corporate Debt in India. Thanks to poor internal controls, bad debts in Indian banks has shot up to INR 7,00,000 Crores (USD 109 billion) over the last two years. In order to defaults companies have been on fire sale of assets: Reliance Communications (RCom), which had debts of over Rs 47,000 crore sold its tower business to escape default default, the Ruias have sold their oil refining business to Rosneft, GMR and GVK parts of their airports and power businesses, and Vijay Mallya parts of his liquor businesses that were mortgaged to fund Kingfisher Airlines.

Jaypee group’s debt is over Rs 75,000 crore (USD 11b). So, according a report in the Hindu:
"... the group has agreed to sell its 20mtpa of cement assets to Kumar Birla-led Ultratech for Rs 15,900 crore. This will leave its listed entities with about 6mtpa of cement capacity, three thermal power plants, one hydropower plant, an expressway project and land parcels. It is looking to sell most of these assets at the right price, but buyers are not easy to come by. Aside from selling stake in its land parcels and the Yamuna Express Highway, the group is looking to sell its remaining cement plants for Rs 4,000 crore and its Bina thermal power plant for Rs 3,500 crore. In the last year, the group has defaulted on payment obligations worth $350 million. Analysts say its capacity to service its debt has not improved."

No wonder there are few takers when the Jaypee Group boss, Manoj Gaur, tries to tell the homebuyers that their "investment is safe".

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LINKS & REFERENCES

* (2017) - http://www.hindustantimes.com/noida/noida-authority-jaypee-tell-homebuyers-not-to-panic-assure-their-money-is-safe/story-nYjtbZb1bR6tzfYbZitI2N.html

Jaggi on the slowdown (30may17) https://swarajyamag.com/economy/not-just-demo-pm-modis-black-money-chase-is-x-factor-in-growth-slowdown

(2017, May) Financial Express - http://www.financialexpress.com/industry/banking-finance/demonetisation-impact-bank-npas-mount-to-rs-614872-crore-set-to-rise-further/558916/
- They now constitute 11 per cent of of the gross advances of Public Sector Unit (PSU) banks. In all, the total NPAs including both the public and private sector banks were Rs 697,409cr in December 2016. These figures were compiled by Care Ratings.

 - 31 May - Reliance Defaults -  https://www.bloombergquint.com/markets/2017/05/31/an-ambani-default-won-t-fly
Andy / Bloomberg - http://m.economictimes.com/industry/banking/finance/banking/at-this-rate-fintech-will-slaughter-indias-banks/articleshow/58782969.cms

The Hindu- http://www.thehindu.com/business/Industry/the-biggestever-fire-sale-of-indian-corporate-assets-has-begun-to-tide-over-bad-loans-crisis/article8573163.ece