Chapter 8B: let me go back to 2008. There was a leadership dispute and one leader decided to turn whistleblower. He let the cat out. Everything. NSE. NPCIL. The war room. LIC. SBI. HDFC. The details reached the PMO. It was clear there was rust all over the ship he was leading.
So what did he do. He said nothing. But he did everything. 2008 meltdown had occurred.
His only strategy was to make sure it didn’t melt India. The world thought he did nothing.
He had two files on his table. One was for the creation of NPCIL. The other was to appoint Citibank veterans to the full board of SBI. He moved to clear both files.
But with some conditions.
He also appointed Congress spokesman and IIT Alumnus Deepak Amin to the SBI Board alongside S. Venkatachalam. The files that had been moved for his appointment were carefully studied. Who moved it? Who recommended it? Those people were all transferred. All with promotions and out of RBI. Doesn’t matter where – but out of RBI.
The initial promoters of NPCI were Citi and HSBC. Whilst Citi hired fiercely ambitious, ruthlessly unethical youngsters from the weaker sections with brilliant academic records, HSBC was more European. Naina Lal Kidwai was a Harvard MBA. She was the grand daughter of the Thapar and Lal / Eicher families. And was married into Mohsina Kidwai’s family. And the DNA ran through the organisation. Unlike Citi, HSBC did not own Discover or Diners. Whilst the business – as the Panama Papers reveal – was broadly similar – it was done a lot more “legally”. They respected laws and didn’t have loose canons in the marketplace. They had no ambitions of taking over India. Dr Singh made sure a new clause was added to the NPCI cap table and that was a “maximum 10% holding per bank”. HDFC, Citi and HSBC could at most own 30%.
In NSE the same playbook was repeated. Max 5% per shareholder and this includes persons acting in concert. Citibank had moved in with 2% – all set to go to 50%. They were stopped dead. The bosses that be pulled him up for these new conditions. He blamed it on the consultants. And of course, the consultants wrote as instructed. Why else is it called “managed” consultancy. Sometime mistakenly called management consultancy.
As he did his own fact finding – he went back to the corporatisation of BSNL in 1999-2000 and the team which had done it. I had led the team and it included legal eagle JB Dadachanji, NM Rothschild and AF Ferguson. In 2007, he had got them to again look at merging MTNL with BSNL. Now he needed money to fill his trench to safeguard against the 2008 meltdown. And spectrum auction was invented.
The entry of Rothschild into the highest echelons of Indian government opened a can of worms which went on to haunt him later. His own minister had to go to jail. And a whole line of bureaucrats were hung. Some deservedly. Some not so much.
And probably led to the end of the congress regime. But maybe it was his way of putting his bosses in their place.
