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Business
Indian Inc was on a roll but faces questions of ethics and corporate governance
The
Indian economy and the corporate sector which was the envy of the world with almost 9 per cent GDP growth rate and several big M&A deals had to face tough questions on ethical deficit and corporate governance following major scams and corporate wars which showed India Inc practices in poor light. India was one of the stars of the world economy with foreign investors pumping in a record $ 28 billion, markets touching record highs of BSE Sensex at 21,000, foreign direct investment at $ 17 billion, exports on track to hit the $ 200 billion mark and corporate sector raising and investing billions as if it was small change. Manufacturing, services and agriculture boosted by a good monsoon, all chipped in to make the growth happen and the Finance Minister, Pranab Mukherjee navigated the economy through troubled waters. India Inc’s biggest corporate patch up happened in 2010 when the Ambani brothers, Mukesh and Anil made peace and signed a new non-compete agreement. The groups said that this agreement will create an overall environment of harmony. That saw Mukesh Ambani’s Reliance Industries announce a massive foray into telecom, acquired shale gas assets in the US and a strategic stake in Oberoi group. Anil Ambani, meanwhile, placed huge orders for his power plants with US and Chinese and is raising funds for debt heavy Reliance Communications. The telecom sector had a bad year as news of the 2G scam threatened to derail the growth story. However, with the entry of new operators competition became intense and call tariffs fell to half paisa a second. This led to subscribers booming and the GSM subscriber base crossed 500 million. After aborted moves earlier, Bharti’s Sunil Mittal closed the biggest M&A deal of the year — $ 10.7-billion acquisition of Zain telecom assets in Africa, the biggest by an Indian company in Africa. Mergers and acquisitions activity was firing on all cylinders as deal volume jumped three times to $ 67.2 billion from $21.3 billion last year. Cross-border acquisitions was nearly half of the total deal volume and was the highest ever. Mahindra & Mahindra bought over the IT company Satyam, which had been in trouble following its chairman, Ramalinga Raju’s confession in 2009 that he had been fudging the company accounts for years. Anand Mahindra’s group also acquired Korean auto maker, Ssangyong. Vedanta’s audacious bid to acquire oil and gas company Cairn India for $ 9.6 billion was still hanging fire with the government for approvals. Its bauxite mining project in Niyamgiri got the red flag from environment minister Jairam Ramesh. Coal India became black gold and the star of the thriving IPO market which on listing became India’s fourth most valuable company at more than Rs 2.16 lakh crore. Public fund raising market was booming with 70 issues raising Rs 72,000 crore. Wipro chairman, Azim Premji was among the business leaders in the news for the right reasons when he transferred his shares worth more than Rs 8800 crore to his trust for philanthropic activities. And, then towards the year-end, the euphoria vanished as the The 2G scam and Radia tapes brought Corporate India under a cloud.
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