Scandals, family feuds keep India Inc on its toes in 2002

Sindhu J Bhattacharya

India Inc was kept on its toes this year, with accounting and bribery scandals rocking its very foundation, mega deals like Grasim's acquisition of Larsen & Toubro facing unforeseen hurdles and government finally arming itself with more teeth to raise corporate governance standards.

It was an year when India lost perhaps its single largest wealth creator, Reliance chairman Dhirubhai Ambani. As if this was not enough, corporate ethics of one of India's biggest corporate icons, Birlas, have been questioned in the L&T deal even as another iconic name of Bajaj has been dragged in a bitter family feud involving Bajaj Auto.

Close on the heels of a spate of scandals hitting the US market, Xerox Corporation confessed that its officials in India had paid bribes to secure government contracts in July this year.

And even as these facts came to light and investigations are yet to be completed, Xerox has quietly effected a change of guard at the Indian office while its joint venture partner --B K Modi group-- has denied any involvement in the deal.

Then the Tata Finance imbroglio hit headlines when accounting firm A F Ferguson criticised the House of Tatas for lax corporate governance systems.

And even as investors were coming to terms with such instances of alleged corporate frauds, Kumaramangalam Birla was battling for control of L&T with Securities ans Exchange Board if India suspecting the mode of acquisition and Larsen and Toubro management pushing a proposal to hive off its cement division.

At the centre of the L&T controversy is Sebi's investigation into whether the Birlas acquired indirect control of the company even before their stake in it crossed the 15 per cent mark even as the tussle on demerger of the company's cement division is on.

Another headline, which surprised India Inc was a pronouncement by Shishir Bajaj, estranged brother of Bajaj Auto chairman Rahul Bajaj, that he wanted out but at a price of his asking.

With mediations of former Maharashtra Chief Minister Sharad Pawar and other stalwarts failing to resolve the impasse, it appeared that Shishir will have to convince the other Bajaj family members before his wishes were realised.

-- PTI

2002: The Year That Was