Anna and the butterfly of the coal fields

Anna Hazare is back where he loves to be — Jantar Mantar and the front pages. Returning after a flop show in Mumbai and a three-month hiatus that followed, Anna has already called the government ‘deaf and dumb’, his lieutenants are slamming the top ministers and the ruling party spokespersons are left haplessly defending the rights of Parliament.

Some would have contempt for the familiarity and find it boring. But, I am beginning to like it. Because perseverance is the key in big fights and perseverance is difficult, expensive and extremely rare. Like the legendary Mohammad Ali, the big boys such as the government float around like a butterfly, wearing out the opponents and buying time for that one killer sting. Just to engage them, one needs perseverance, trainloads of it.

The government seems to be playing the butterfly trick in the latest controversy around Coal India. UK-based hedge fund TCI, an investor in Coal India, has been writing to the management, board and the government, which is the largest shareholder, on various governance issues for almost a year. The fund says it is genuinely interested in improving the operational efficiency of the company, profitability and as a consequence maximise its own returns from the investment. It has also put up a website called www.coal4india.com, an oracle on Coal India and issues faced by it.

Two weeks ago, the fund threatened to sue the directors of the company for failing to protect investors’ interest. TCI’s move was hailed by many commentators, including in international media, as a watershed event. It was variously described as “a wakeup call”, “a low-risk, high-reward activism” and so on. But there were also comments saying TCI was being plain naïve or doing a publicity stunt, like Anna is often accused of. Didn’t TCI know when it bought shares that the government was going to manage Coal India just like any other public sector company?

It is fair to believe TCI knew. In the run-up to the jumbo IPO in October 2010, some top minds had told me how populism is going to be a catch for minority investors inspiring this report, published in the paper I was then writing for.

The report had said: “Coal India, which is hitting the market with a record $3.4 billion (Rs 14,970.20 crore) IPO, sells coal at a price that’s lower than global prices because it’s considered to be a fuel used by the masses.” Arun Jethmalani of Valuenotes Database said. “I would like to share the profits when the coal prices globally are ruling high.”

Thus, the government’s policies were never a great secret. But, does that make TCI’s fairly public, rabble-rousing less credible or insignificant? I don’t think so. Like Anna, TCI has chosen to stand up when most others have taken things for granted. Like Anna, it is fighting from within the system. When you fight from within the system, you are likely to be limited by its constraints. These constraints may even make your solutions that much less effective. But you have to persevere. Like Anna, you have to come back. If TCI wants to be in the game, it has to persevere, it has to try and out-float the great Indian butterfly.