The Tata Saga – Part 12A
Two dead souls haunt the group. Cyrus Mistry and Pendse. Both were innocent. Both had a violent death. Both wanted to do one thing that Chandra did not want to. And that was to go clean. No business in an emerging market is 100% clean. There are worms all around. And if you open that can of worms, the worms may never stop.
Pendse wanted to go clean. He wanted to confess what Tata Finance had done to bolster Tata group shareholding in the Tata companies. Remember JRD Tata ran the Tata group with very little shareholding or voting power. Many companies were single digit percentage holdings. Pendse was the man who did the magic which increased that holding to a very healthy double digit.
Like equity out of thin air.
It is called fraud. But then these are very strong words with very negative connotations. Finally what is a little bit of tweaking of books to achieve a nobler clause. RBI is usually ineffective – and have become more so with the passage of time. But on that unfortunate day shortly after y2k – a smart RBI officer caught them. He opened the so called cab of worms. And there were worms all around.
Pendse was offered a bribe to “manage”. He refused. The auditor was asked to “manage”. But this was a very credible auditor who “refused to even consider considering” such a thing. Five people were called in to “manage”. Venkatachalam and Pamit Jhaveri from Citicorp, a CA called Venkatram, a trusted veteran called Ramadorai and his entire village clan led by his relative “now N. Chandrasekhar, Chairman Emeritus”. From the govt side, the trusted one was KP Krishnan. A senior IAS and his wife, an equally senior veteran.
Sambhar runs thicker than blood.
There was no Dal Makhni involved.
But who will manage the “rest”. And so came Nira Radhia – fresh from an assignment with no less than the only “A”. This is before we had A1 and A2 milk. Nira had been an air hostess. She was willing to learn. She already knew a lot of things. And a lot of Lutyens Delhi.
On Sikandra Road in the heart of Lutyens Delhi was a 6 acre bungalow. Opposite Lady Irwin college. My colleague Ravi Sharma was then the Chairman of Alcatel Lucent. He was then India’s highest paid corporate executive. In an office, larger than his was a startup – Vaishnavi Communications. Nira was the founder and Chairman as per her board. In the secretaries room outside her sat, DPS Seth – a just retired CMD of BSNL. I had been on the BSNL selection team and knew them all. What services was this group offering and to whom ?
A bigger drama was playing out in Bombay. Based on advice from the Mohanar team, the Tatas had filed a FIR on Pendse alleging fraud. This was the most trusted finance person in the group.
The shock waves travelled far. At 1, Dalal Street, the partners of India’s largest accounting firm AF Ferguson & Co were in a huddle. Tatas had been caught with their pants down. And they had signed the balance sheet.
Now what !!!!
(To be continued)
