By Raffique Shah
Sunday, April 6th 2008
ON March 26, Tata Motors, a division of India’s oldest and most diversified conglomerate, paid the mighty Ford of America US$2.3 billion to acquire two jewels in Britain’s motoring crown, Land Rover and Jaguar. The next day Tata Chemicals acquired General Chemicals of the USA for US$1 billion. Even as the Tata Group spread its wings across the globe, a handful of Trinidad and Tobago’s biggest businessmen and institutions gathered at the Trinidad Hilton to sell their shares in RBTT to the Royal Bank of Canada (RBC).
These hot-shot entrepreneurs and managers of workers’ pension funds, for less than the proverbial mess of pottage, parted with an institution that evolved out of the struggles of 1970. The first Black Power demonstration had targeted RBC’s main offices on Independence Square. Shortly afterwards RBC started divesting its interests here (along with several other multinationals) and by 1985 RBTT was an all-local company. Even though banks are not my favourite institutions, what with their many spurious ‘fees’ and ‘charges’, I felt proud as a Trini walking through the capital cities of several Caribbean countries and seeing the RBTT logo.
Soon, all of that will be history. RBC paid our financial wizards less than US$4 per share in cash (TT$24), with a commitment to add another US$2.50 (TT$16) in the Canadian company’s common shares. Not only did those captains of industry and commerce accept the pittance with wide grins and high-fives, but they felt no pang, no pain, in stripping their native land of one of its landmark financial institutions. “We win!” they must have chanted, much the way sports fans do when our teams are beaten.
I started this column referring to recent acquisitions by the Tata Group to show the stark contrasts between astute and visionary entrepreneurs, and parlour-owners-turned-shopkeepers. True, Tata has a long history-founded back in the mid-19th century. True, too, Indian companies were walking before ours could creep. But in today’s globalised world, this country’s business sector should be blazing new trails. When I scan the horizon, I see only one real entrepreneur, Lawrence Duprey.
Almost three decades ago, when Prime Minister Dr. Eric Williams decided to take this country down the industrial growth-path, he lamented the fact that local investors showed no interest in putting their money where their big mouths were. It was left to government to start a steel mill (bad idea at the time) that would only see profits when another Indian magnate, Lakshmi Mittal, acquired it for a song. Giants like Neal and Massy and Ansa McAl stuck to the safety of businesses they knew. Duprey, advised by some of the finest minds in the industry, plunged into methanol. Today, not only does the CL Group own the most methanol plants here, but Duprey has personally spearheaded acquisitions of liquor companies abroad, negotiated with sheiks to get involved in downstream gas plants in the Mid-East, and more, much more.
Whatever one may think of Duprey, at least he shows spunk. Ratan Tata may not be wealthier than Mittal, but he’s visionary. Look at his ‘Nano’ car unveiled in India a few weeks ago. Besides conceptualising the cheapest automobile in the world, Ratan cut the dealership crap and will sell the ‘Nano’ knocked-down at US$2,500, to be assembled at registered garages. With Asia’s middle class rising faster than food prices, the ‘Nano’ will soon furnish tens of millions of them with affordable ‘wheels’. That is vision.
Most local businessmen, like those who sold RBTT, would never dream of doing what J.P. Morgan’s CEO Jamie Dimon did: he offered rival Bear Stearns’ shareholders US$2 per share-a virtual fire-sale price. Of course they rejected it. But Dimon knew he would up the ante-later $10-and take the ‘Bear’ when it’s down. It will rise again. But when it does, it will belong to Morgan. Our businessmen seem content with pouncing on small fries in the Caribbean instead of going after wounded big game in the developed world.
They are neither inventors nor innovators. They remain traders: buy cheap, sell ten times the cost, get rich quickly, and everyone who worships wealth looks up to them as gods. That’s why India and China and other Mid-East and Far-East entrepreneurs and countries (through their sovereign wealth funds) are miles ahead of us. Dubai Ports World is buying up strategic ports across the globe. The Abu Dhabi Investment Authority (ADIA), with some US$900 billion in its camel-bank, is sending shivers down the spines of the biggest conglomerates in developed countries.
We boast of being the ‘sheiks of the Caribbean’. But with the mentality that led our local ‘shakes’ to sell RBTT to RBC, we are doomed to dwell in mediocrity. Interestingly, I don’t know that Canada will allow any of its major banks to fall into foreign hands not even Abu Dhabi’s. Take a bow, Arthur, Peter, Suresh and sundry others who did the dirty deed in the face of mass protest from those who value patriotism over a pittance. Your new motto: Backward ever, forward never.