Letter to BS: Flipkart, Future Retail, Jet have fallen in quick succession

This refers to the front page report by Shrimi Choudhary and Arindam Majumder (November 29). It heralds a sad development in the Indian civil aviation industry. The fact that Naresh Goyal (pictured) prefers to sell his shares to Etihad and not Tatas doesn’t speak well either about him or the Tata group. Obviously, Tata’s offer was too rigid — specially their condition about Goyal walking into the sunset — and Etihad jumped in with a sweetener allowing the original promoter to continue as chairman. The Abu Dhabi-based company will still be the de facto driver at Jet and call the shots; Goyal will remain a chairman. Tatas too could’ve agreed to this kind of an arrangement.

This is just another sad case of an Indian company falling into foreign hands. A less than enthusiastic approach by domestic investors and a lack of pragmatism on their part in helping out domestic companies in trouble is helping many foreign giants to grab some of our good companies at distress prices. Flipkart, Future Retail and Jet have all fallen in quick succession. There might b a few more in the pipeline. 

One of the factors helping such takeovers is the rule preventing promoters to have preferential voting rights that is quite common in Western economies. The government and the Ministry of Corporate Affairs must have a relook at this provision.

Krishan Kalra, Gurugram

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