The Return Of The Hunter

In March, Ashish Dasgupta broke the legendary hunter Jim Corbett's record of killing the biggest man-eating leopard. Dasgupta outdid Corbett's leopard by half an inch.

Naturally, the event thrilled Dasgupta, but it did not stoke his predatory instincts half as much as the events of a few weeks later. That was the day he regained control of a shock absorber company he promoted in 1985 from partners Mannesmann Sachs AG of Germany.

April 3, in fact, was a frantically busy day for Dasgupta. In the morning he shook hands with Franz J Hermes, commercial director of Mannesmann Sachs AG of Germany, and regained control of shock-absorber company Sachs India. Two-and-a-half years ago, Mannesmann had taken over the company from Dasgupta. But on this day, it sold its 57 per cent shares in the company to Dasgupta for an undisclosed sum improving his stake in the company from 15 per cent to 72 per cent.

 

Dasgupta then set about replacing the Mannesmann dominated board of directors. On the board of eight, Mannesmann had six directors, while ICICI, the lead financial institution had one nominee, and the Board for Industrial & Financial Reconstruction (BIFR, Sachs India has been in the sick bay for over half-a-decade now) one nominee. Dasgupta secured the resignation of all the Mannesmann directors, joined the board and appointed two new directors: Kirnesh Jung, a leading farmer and mine-owner of Himachal Pradesh and Chinubhai R Shah, a management advisor to Cadila Pharmaceuticals, and the former managing director of Ahmedabad Electricity Corporation.

But he was not yet done for the day. He also got the nod of the registrar of companies to change the name of Sachs India to Autocomps India, the third time the company's name has been changed. Later in the day, Hermes issued a statement confirming the day's developments. "The decision to exit from Sachs India is a part of the global strategy of the Mannesmann group," the letter reads.

It was a victory to be savoured for the ex-JK Synthetics employee. Dasgupta had set up a shock absorber unit at Parwanoo in Himachal Pradesh in 1985. The company was called Sirmour Sudburg. Some time in 1996, Dasgupta realised that to survive in the fiercely competitive market, he would have to get a foreign partner in the company. He short-listed two companies: Delphi of the US and Mannesmann. Finally, he decided to walk the altar with Mannesmann. In June 1997, Mannesmann acquired a 51 per cent stake in the company through a preferential issue at a cost of Rs 16 crore and re-christened it Sachs India. Dasgupta's stake dwindled from 51 per cent to 15 per cent .

An agreement was drawn up between the two under which Dasgupta would continue as the managing director and look after marketing, and all other functions would be taken care of Mannesmann. But it didn't work. Mannesmann blamed the company's losses on bad management by Dasgupta. (Sachs India has losses aggregating Rs 31 crore on its books.) Things came to a showdown within three months of the joint venture on September 29 when the board met to remove Dasgupta from the managing director's seat. While the ICICI and BIFR nominees abstained from voting, all the Mannesmann nominees voted for Dasgupta's ouster. Piqued, Dasgupta also quit from the board of directors.

The battle then moved from the boardroom to the courts. Dasgupta challenged his ouster in the courts. In turn, Mannesmann filed cases against him relating to mismanaging the company's resources. A deadlock ensued. Meanwhile, Dasgupta had fallen to hard times. The loss of the managing director's post had robbed him of a steady income and there was no question of any dividends from his 15 per cent shares in the ailing company.

In mid-1998, Mannesmann vice-chairman Hermann Siegle came to India. To get to the bottom of the bitter squabble, he sought a private meeting with Dasgupta. The two met at the picnic spot of Timber Trail on the way to Shimla from Parwanoo. At the end of a six-hour long meeting which ended well past midnight, the two agreed to work constructively together.

"That was the turning point in our relationship," Dasgupta says. Still, he had no idea that he would soon be back in control. In fact, he got a commitment from Siegle that Mannesmann would buy out his 15 per cent shares at the rate of Rs 45 per share. Meanwhile, Mannesmann had increased its stake to 57 per cent through another preferential issue.

In October 1999, Dasgupta got a missive from Mannesmann saying that it wanted him to not only join the board of Sachs India as it nominee but also take over as the managing director. Dasgupta agreed. On 24 October when his car reached the factory gates at Parwanoo, all the workers, who had worked with him not so long ago, picked him up on their shoulders and carried him into the factory. Dasgupta was touched. But still, there was no hope of becoming the principal shareholder.

Then earlier this year, Mannesmann was taken over by Vodafone Airtouch Plc of the UK. Being a telephony company, it sold the auto-components division of the company to the Siemens Bosch group. And a decision was taken to bow out of the Indian joint venture. Mannesmann decided to turn over all its shares to Dasgupta for a nominal price. ("It is not a sale price, it is a settlement," says Dasgupta).

In return, Dasgupta has taken over the liabilities amounting to Rs 1.5 crore. Both have withdrawn all legal cases against each other. On the eventful day of April 3, the two parties put ink to the agreement in Delhi at the office of Mohinder Puri & Co, Mannesmann's representative in India.

Once again in the driver's seat, Dasgupta has already kickstarted ambitious plans for Autocomps. Mannesmann has left him a fully-automated plant comparable with the best in the world. He is now scouting for a partner to make front forks for motorcycles." I am not against joint ventures. But the Indian partner should always read the fine print carefully," he says. He speaks from experience.