Chidambaram Vs Ibrahim

The similarity with the Janata Dal government in the 1970s is uncanny. That government had George Fernandes, an equally ambitious newcomer. He made his name by throwing out Coca-Cola because it refused to dilute its shareholding. That single decision made Fernandes the idol of Indian xenophobes, and led to an exodus of foreign companies. It was just incidental that the exit of Coca-Cola was of considerable benefit to Parle, the company run by Ramesh Chauhan. The same Mr Chauhan sold his business to Coca-Cola for Rs 120 crore plus running franchise and consultancy fees. There is money in throwing foreign companies out of India, and money in bringing them back in.

The reason for Mr Ibrahims xenophobia, which sets him apart from all his senior colleagues, is public: he favours the government airlines, Indian Airlines and Air India, against all private comers. But other reasons may not be so far below the surface. A number of private airlines, Modiluft foremost amongst them, are deep in debt to foreign airlines which have lent them planes, pilots and management assistance. The foreign airlines would like to foreclose. The outcome can be either the closure of some of the private airlines and sell-off of their assets to pay off debts, or conversion of their debts, notably to foreign airlines, into equity. The private airlines do not fear liquidation, which can be put off in a hundred ways and is a process lasting decades anyway. But they would hate to lose their business to their foreign partners; and this is what Mr Ibrahim has obligingly offered to prevent. They must no doubt be suitably grateful.