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A M Naik, the non-executive chairman of the country's largest construction and engineering firm L&T, has recalled in his biography how he thwarted hostile takeover bids from the Ambanis and Birlas in early 2000s when the company had almost slipped from his hands. Speaking at the launch of his biography titled 'The Nationalist', authored by columnist Minhaz Merchant, here last evening, Anil M Naik also reminisced about the historic three-phased demerger of Larsen & Toubro (L&T), which led to its emergence as a top player in engineering, manufacturing and projects segments. Significantly, both Mukesh Ambani, chairman of Reliance Industries and Kumar Mangalam Birla, chairman of Aditya Birla Group, were present on the occasion when Naik nostalgically recollected how he battled against the two powerful Indian conglomerates. In 1987, the late Dhirubhai Ambani had managed to wrest significant holding in the cash-rich L&T and then launched a hostile takeover bid in 1989. However, political and other developments ensured Reliance remained a passive shareholder. Naik, who joined L&T as a junior engineer in the mid- 1960s and went on to become its Chairman, recalled in the book the events leading up to Reliance's stake sale. According to the book, it was in November 2001, when Naik, then CEO and Managing Director, who was in Chicago, got a call from Mohan Karnani, then president of L&T cement business saying 'apna maalik badal gaya hai' (our owner has changed) and that the Birlas had bought complete stake of Reliance Industries in L&T in an all-cash deal. "Within few minutes got another call from Anil Ambani, the then managing director of RIL, saying 'Anilbhai (Naik) you never wanted us. So we are going. We have sold the entire shareholding of Reliance in L&T to Kumar Mangalam Birla'," the book quotes Naik as saying. Naik recalled that he got another call, this time from Birla, who said "you didn't come to us Naikji. So we have come to you." "In the end we kept L&T independent. We ringfenced it from future takeover attempts by setting up the L&T employees welfare foundation that eventually bought Birlas stake.
And the Birlas got our demerged cement business that added to their cement production capacity. "It relieved us of a non-core asset-heavy business, making us an AAA rated company by drastically cutting out debt equity ratio. It was a win-win for all," Naik said in the book. "What seemingly started as a conflict situation with Grasim ended in a win-win solution for both the companies. Grasim became the largest and top quality cement producer and L&T emerged as one of the best engineering, manufacturing and projects company in this part of the world. "A great moment of satisfaction came when, at the end, Mr Birla extended his hand to me and said, 'history should never, never forget you. You know what you have achieved: employee ownership of the company'," Naik remembered. Since the time Naik took over as the chief executive officer in 1999, the group revenues between 1999 and 2017 have grown from Rs 5,000 crore to nearly Rs 1,25,000 crore on a like-to-like basis. During the same period, market capitalisation rose from around Rs 2,000 crore to over Rs 1,70,000 crore. Describing L&T as a temple, the 75-year-old corporate honcho and Padma Bhushan awardee says in the book, "I am devoted, committed and married to L&T. Do you know that in my first 21 years in the company, I didn't take a single day off? My parents were considerate, too. My father passed away on a Sunday, a holiday, and two years later, my mother died on August 15. Even they didn't want their son to take leave!" "For 53 years I've worked for 15 to 16 hours a day, sometimes even on Sundays and holidays," he said. He also admitted that he should have spent more time with his wife and two children, who now live in the US.