Sunday, February 27, 2011

Feathering one's nest : Do IITs and IIMs make a difference ?

Chairman and Managing Director of NALCO , a public sector unit, has been arrested on charges of corruption. He is a mechanical engineer and had studied in IIT, Delhi. Abhay Kumar Srivastava was earlier CMD of Cement Corporation of India, another public sector unit.

Srivastava's appointment as CMD of NALCO was a subject of controversy as the following report which appeared in the Business Standard on October 2, 2009 exposes:

"Abhay Kumar Srivastava, the chairman and managing director of Cement Corporation of India (CCIL) today took over as CMD of navratna public sector unit, National Aluminium Company Ltd (Nalco).

Srivastava, a mechanical engineer by profession, took over from C R Pradhan, who retired as Nalco CMD yesterday. Before joining Nalco, Srivastava was heading CCIL, a Govt. of India Undertaking under ministry of Heavy Industries & Public Enterprises, as its CMD for about 5 years.
However, Srivastava’s appointment to the new post is not without its share of controversy as a shareholder has filed a petition in the Orissa High Court challenging his appointment to the post.
The petitioner pointed out that in the interview held for the post of Nalco CMD in 2007, C R Pradhan, who has been acting as the CMD in charge since February 2005, was empanelled as the number one candidate followed by A. K Srivastava in the second slot.
The panel was valid for one year.
Though the panel of name was finalised in October 2007, Pradhan’s appointment was delayed till 3 August 2009. On Pradhan’s retirement, the petitioner argued, fresh process of selection should have been started by the ministry of personnel, public grievances and pension and the Public Enterprises Selection Board (PESB) giving opportunities to all those candidates who had not qualified for the post in the earlier interview.
However, the PMO in violation of all the established guidelines and procedure appointed Srivastava, the second person from the panel as CMD, Nalco from 1 October 2009, long after the validity of the panel had expired, the petitioner pointed out."

One is tempted to think that a person who does not hesitate to swindle money would have unhesitatingly purchased his way in career progression. His wife also has been arrested.

Media reports indicate that Ms.Srivastava's bank lockers contained 10 kg of gold bricks, jewellery and Rs.24.5 lac cash. She was also carrying with her Rs.5 lac when she was arrested in a bank branch in Delhi. She had opened bank accounts using forged PAN card. It is surprising that A.K.Srivastava appealed to the court where he was produced,  not to be sent to police custody as he could then be placed under suspension and that it would cause irreparable damage to him. Ms.Chandni Srivastava told the judge to excuse her spouse since he had nothing to do with the bank lockers.

Institutions of higher learning like IITs may not immunise the students from greed (in fact, it may be fostered), but the students of such institutes are supposed to play fair and not indulge in social evils like corruption. Spousal contagion effect also might have played a part in this sordid story.


Saturday, February 19, 2011

Well done, Mr. Prime Minister

Manmohan Singh interacted with editors of various TV channels recently and was true to his form. He proved once again that he is a highly-evolved spiritual person. The prime minister made it clear that he does not do what ordinary mortals may think he is doing. When asked why he accommodated Raja in UPA2, he clarified that in a coalition government ministers are nominated by participating parties and therefore where is the role of a mere prime minister. Another gullible editor quizzed him on the 2G scam. Once the Finance Minister and the Telecom Minister had decided, what did the prime minister have to do ? Great reasoning.

It requires real grounding in spirituality to appreciate that "we" do not do what we do. There is an an unseen power behind all that is done (never mind it may be Sonia Gandhi or Karunanidhi). Collective responsibility makes sense only to those who are spiritual dwarfs. We may wonder why the prime minister has suddenly brought in Chidambaram as one of the architects of the 2G scam. But this must have been foreseen by PC. The Finance Minister had already prepared his counter to Singh's attempted deflection. In the post dated 22nd Nov 2010, under the caption "The 'presumptive' argument" we had ventured to comment as follows :

"The ever-repulsive spokesperson of the Congress party has unconvincingly argued that CAG's report on 2G Scam refers only to "presumptive loss" to the exchequer and therefore the country is needlessly agitated over a non-issue.

Even before we could digest this argument, the normally sensible P.Chidambaram has sought to throw further light on the theory of presumption. "I place some 50-60 signatures in a day with the presumption that they are right to the best of my knowledge. Perhaps few may go wrong, but they were not malafide because the intentions were right." (The Hindu dated 22nd Nov.)

Is Chidambaram serving advance notice on the prime minister ? This specious presumption argument can be used by every decision-maker. So no one can be held accountable for any decision, for who will accept his intentions were wrong? "

Who is more spiritual, Singh or Chidambaram ? Which is higher spiritual philosophy, "I do not do what I appear to be doing" or "My view is not what I have signed" ? It is time we had lesser mortals as ministers.

Monday, February 14, 2011

Politics in Air India (updated on 7th March)

The following was posted on 29th March, 2010 under the caption "Air india's intriguing transparency". It was suggested that if a foreigner was appointed as AI's COO, problems would abound since he would not be comfortable with political nuances in managing the organisation :

"It is customary for companies to be discreet about selection of new CXOs and not to announce names of contenders / applicants till the final choice is effected. One is surprised therefore that Air India sources have gleefully announced that the new COO will be one of the three shortlisted who have been named. They are presently with Austrian Airlines, Air Malta and Rapidair.

Will this not needlessly create friction in the relationship of these applicants with their present employers ? This apart, is it likely that there is no one within the country who can do a better job ? Air India is not just a business organisation. It is also caught in a political cobweb and hence someone more appreciative of India's political nuances would be a better choice. But then, serial bungling is Air India's forte ! "

Unfortunately the prediction has come true so soon.

The Financial Express has published the following interview with Gustav Baldauf, COO, Air India:

"Gustav Baldauf, the COO of Air India, has not had a smooth flight eversinceheassumedoffice.Soonafter he got the offer letter, his annual pay package of about Rs 3 crore created a storm with airline employees openly questioning the management's decision to appoint him.Subsequently,he had to face the ire of the aviation ministry for being on foreign trip when the airline was shifting its operation from the old terminal to the modern T3 at the Delhi airport. His decision to appoint Pawan Arora as the COO of the airline'sbudgetarmAirIndiaExpress has been revoked by the govern ment. In an interview with FE's Nirbhay Kumar, Baldauf spoke regarding the controversiessurrounding him stating that politics seems to be driving decisions in AI, which is not good for anybody.

How do you read the government's decision to sack Air India Express COO Pawan Arora?

I would not like to comment on the decision. What I though understand from the development is that a lot of politics is going on. Politics is influencing the decisionmaking in the airline. It's not good for Air India. It's not good for the country as the entire world is watching it. I don't want to go into politics.

There are reports that other outside professionals could also be in the firing line including you...

For appointment of the airline COO advertisements were publishedinternationally .Candidates across the world applied for it. I was selected purely on the basis of merit and experience. I am an operational expert and just want to do my job. However, it's difficult to work in this environment. It negatively affects the morale of the employees. All the new people who have joined are professionally competent. Captain Arora, for example, was very focused on his targets.

It's only bad things which keep appearing in the media about Air India. I don't want my staff to be de-motivated by reading newspaper reports in the morning. Only badthings are pointed out.Nobody looks at so many good things happening in the airline since these are expected. I have rarely heard peopletalkingaboutourpreparedness during the fog season, optimum utilisation of the fleet and rising load factor, for instance. What's the progress on the implementation of the turnaround plan?

The turnaround plan is not something which could be implementedoverthree months or six months. It's a complete threeyear plan. As part of this,severalstepshavebeentaken and further steps need to be taken consistently . The government wants us to improve. It should help us in doing that. The two airlines (Indian Airlines and Air India) have been merged. It's a totally new company . So, several operating processes have to be put in place. The three key processes -flight, customer service and HR are being streamlined. We are taking measures to address HR issues.

With several things in place we are doing better and better.However,it takes time to set up systems.

You have worked with so many airlines and in so many countries. How has been your experience working with Air India?

I have seen different cultures. I grew up in Europe. It's easy to build systems in Europe. It's a bit difficult in Russia. It's even more difficult in India since the culture here is different. In Air India, the system is completely different."

It is also surprising that people are ready to become CXOs without making any due diligence about the companies they are joining.

Update on 7th March 2011: Gustav Baldauf has since resigned. The new Minister for Civil Aviation says GB has not been able to convince him on his work.

Saturday, February 12, 2011

Confusion Galore

Senior counsel K.K.Venugopal and Attorney-General Vahanvati are arguing for the CVC Thomas and the Central Government respectively in the Supreme Court case questioning the propriety of Thomas' appointment as CVC. Both are arguing that the appointment is proper and at any rate not questionable by the Court.

10th February saw both these eminences put forth their views in the court. There was a glaring contradiction in their opinions regarding  presidential powers on appointment of CVC.

Venugopal was emphatic that " in the case of appointment of the CVC, the President exercised the discretionary power and not on the aid and advice of the Council of Ministers. While so, such discretion could not be a subject matter of judicial review".

Vahanvati was equally forthright when he said, "once the recommendation goes from the PM, it is binding on the President to give assent and she has no other option".

Obviously, both views cannot be simultaneously tenable. In their anxiety to protect Thomas, the learned counsels are telling the Supreme Court that it may interpret the law whichever way it wants so long as it upholds the appointment of Thomas.

Most painful let-down

Ratan Tata's role in the 2G episode is among the most unexpected disappointments in recent times. What has devalued the Tata image even more is the total absence of remorse or contrition on his part. The New Indian Express has reproduced a letter written by Ratan Tata to the Chief Minister of Tamil Nadu on 13th Nov 2007 :

" Dear Mr Chief Minister, I am taking the liberty of writing to you on the subject of the telecommunication sector which has been in the news these past few weeks and where there has been much public controversy ­ mainly created by powerful vested interest groups within the industry.

Ever since Mr Raja took over as Minister, there has been a rational, fair and action-oriented leadership in the ministry. On the issue of spectrum also, his stated policies, for most part, have been legally sound, rational and well-reasoned. Part of the existing controversy revolves around one approval, which is being contested in the courts. In all other cases his stated polices appear fair and he deserves everyone's support.

The telecom industry is the fastest-growing sector in this country's history and the leadership to this sector is with your party.

It is essential that history praises the vision, creativity, and high growth achieved by you and your Minister. Our industry is in the viewing glass of the entire world, because our market is so large. If done well, the DMK can possibly claim telecom to be its greatest achievement and most significant contribution to the nation's growth.

This growth would need to come from rational and fair polices ­ without favorites and without pandering to vested interest groups who are only interested in serving themselves.

I have the highest regard and respect for you as a person of great equity and great vision. I would like to see you derive great kudos for the visionary growth in this sector, which I believe can be delivered  under your leadership by Mr Raja.

I have therefore requested Ms Niira Radia to personally carry this letter to you and to explain to you the public perceptions, the orchestrated misinformation and the vested interest that are seeking to de-rail the process of growth through technological and spectrum battles, rather than seeking national gain.

I hope you will take this letter in the spirit in which it has been written.

With regards Yours sincerely Ratan"

The self-righteous stand adopted by this doyen of industry is hypocrisy at its worst. Unedifying blend of sycophancy and condescension employed in the letter is unbecoming of even lesser mortals, not to speak of Ratan Tata.

Tuesday, February 08, 2011

Did Amartya Sen overvalue democracy?

Amartya Sen had famously said that large-scale famines would not occur in a democracy in view of accountability factor. Current events in India vis-a-vis the happenings in Tunisia and Egypt are eroding the credibility of Sen's assumptions.

Multiple scams in India including 2G, ISRO etc. indicate clearly that massive corruption and lack of accountability are not alien to a democratic system. In Tunisia, the act of a police official slapping a fruit vendor was enough to trigger the justly famous Jasmine Revolution. A despot has to be perpetually on guard to ensure that subjects' ire does not gather the critical mass to morph into people's movement. On the contrary, the leaders in a democracy need to be careful only once in say 5 years when elections are held. Victory in one election, however unrepresentative it is, is enough to legitimise misrule till the next elections are on.

Friday, February 04, 2011

Does corruption matter ?

Let us first read what our Home Minister says:

On the penultimate day at Davos, Home Minister P Chidambaram spoke to P Vaidyanathan Iyer of The Indian Express about the India show at the World Economic Forum (WEF) and asserted that no foreign leader or investor has raised any issues on corruption back home. Excerpts:

Some WEF participants have raised issues relating to governance deficit and corruption in India. Any comments?

No foreign leader, investor—and I have met dozens of them over the last few days — has raised with me any issues relating to corruption or money laundering. Nobody has spoken to me about these issues. It is unfortunate that a section of the Indian media is playing up this issue. In fact, we have discussed issues relating to investment, international economic situation, and the crisp growth rate that India is recording, even in a time of uncertainty.

Now let us read what the Prime Minister feels: ( A report in The Hindu quoting the PTI)

With his government under attack over various scams, Prime Minister Manmohan Singh on Friday spoke out against corruption, saying that it strikes at the roots of good governance, dents the country’s international image and “demeans us before our own people“.

“This is a challenge which has to be faced frontally, boldly and quickly,” he said addressing the annual conference of Chief Secretaries of States in New Delhi.

He said, “Corruption strikes at the roots of good governance. It is an impediment to faster growth. It dilutes, if not negates, our efforts at social inclusion”.

“It dents our international image and it demeans us before our own people,” Dr. Singh said
Serious concern has been expressed in many responsible circles about the lack of ethical conduct and probity in public life, he said.

Who is right and who is wrong ? One thing is clear. With such dysfunctional divergence of views at the top, the corrupt in the country can continue to feel totally safe.