Archive for the 'Business' Category

Rajat Gupta’s phone call: by Sandipan Deb

In Mint, a chapter from ‘Fallen Angel’, Sandipan Deb’s new book on the rise and fall of Rajat Gupta. [Sandipan has two books out in the market in one month. The other book is on Mahabharata set in Mumbai's underworld.]

The only phone conversation between Rajaratnam and Gupta that the US government was able to tap took place in the early evening of 29 July 2008. It lasted eighteen minutes. The conversation is, to say the least, revealing. Gupta sounds unsure and confused at times, and is looking to his friend for career advice. He is also lobbying for a bigger role in the Galleon Group—and more money.

It is obvious from the conversation that Gupta is well aware that his long-time protégé, and McKinsey employee, Anil Kumar, is working on the sly for Rajaratnam and is getting paid for it. Gupta has now been retired from McKinsey for about a year, but the conversation implies that it is very likely he knew about the arrangement between Rajaratnam and Kumar while he was still working at the firm.

After the usual pleasantries, Rajaratnam, who is suffering from a cold, mentions that he has called because he is meeting Gary Cohn, president and chief operating officer of Goldman Sachs, in two days, then goes on: “And there’s a rumour that Goldman might look to buy a commercial bank.” Gupta is initially non-committal, but Rajaratnam asks him point blank: “Have you heard anything along that line?” He mentions Wachovia, at that time the fourth-largest bank holding company in the US in terms of assets, but in deep trouble. More:

Pakistani fish seller’s song gets record deal

In The Sun:

“Come on ladies, come on ladies, have-a, have-a look, one pound fish. Very very good, very very cheap, one pound fish.”

Once you’ve heard it you can’t get it out of your head — and it might just be the Christmas No1.

The One Pound Fish Song is the creation of market stall trader Muhammad Shahid Nazir who has just reeled in a record deal with Warner Music.

He was spotted after a YouTube video of him singing at an east London market notched up more than 3.6million views. Not bad for a guy who was rejected by the X Factor panel.

Now Warner Music execs reckon he could be as big as Gangnam Style star Psy — and are pitting him against the winner of X Factor for the most remembered hit of the year.

Alesha Dixon and US boy band Mindless Behaviour have both recorded versions of the song and Rio Ferdinand has tweeted that he’s a fan. More:

Hukus Bukus Telewan chukus

Vikram Pandit’s resignation: The inside saga


Vikram Pandit, who was named chief executive of Citigroup Inc. on the eve of the financial crisis and led the bank through a bruising five-year stretch that included a $45 billion federal rescue, abruptly stepped down Tuesday.

Mr. Pandit, 55 years old, departed following a clash with the board over strategy and performance, according to senior bank executives and advisers. Citigroup, the nation’s third-largest bank by assets, named Citigroup veteran Michael Corbat, 52, as Mr. Pandit’s successor.

Mr. Pandit’s resignation came after a series of missteps this year left some directors feeling that the company wasn’t being managed effectively and that the board wasn’t kept adequately informed, according to the people. Citigroup shares dropped 89% over Mr. Pandit’s tenure, and the company was hit this year by a shareholder revolt over executive pay, by the Federal Reserve’s rejection of its plan to buy back stock and by a $2.9 billion write-down of a brokerage joint venture with Morgan Stanley.

The shake-up amounts to an extraordinary flexing of boardroom muscle at Citigroup, a company that until recently had a board stocked with directors handpicked by former CEO Sanford Weill who rarely challenged management decisions. More:

When Air India was efficient, profitable and growing fast

A Tata Airlines route map from 1939. Image:

Samanth Subramanian in India Ink / NYT:

Tata Air Mail made a profit of 60,000 rupees its first year. By 1937, that profit had risen to 600,000 rupees. Auxiliary routes were developed, but its main one continued to retrace the 1932 trial run by Mr. Tata and Nevill Vintcent, skipping from Karachi through Ahmedabad and Bombay to Madras. A handsomely illustrated 1935 timetable (mentioning, as an aside, that “Tata Air Mail ‘Planes are lubricated with Mobiloil”) reveals that a letter from Karachi to Madras would leave on Monday between 6 and 6:30 a.m., pass through Ahmedabad four hours later and Bombay around lunchtime, spend the night in Hyderabad, and arrive at the Madras airport at 9:55 a.m. on Tuesday.

In 1938, just after Mr. Tata changed the name of his company to Tata Airlines, he began to run regularly into a fickle and obstinate government, a process of attrition that wearied and exasperated him for the next 15 years. During World War II, the government commandeered all his aircraft. When he offered to manufacture the De Havilland Mosquito in India, he was first encouraged and then instructed to make gliders instead. Not long thereafter, the government cancelled the contract because, ironically, it didn’t have airplanes to tow the gliders – the very airplanes that Mr. Tata had offered to make in the first place. More:

Where do India’s billionaires get their wealth?

Michael Walton and Aditi Gandhi in the Economic & Political Weekly:

Out of India’s 46 billionaires in 2012, 20 had drawn their primary source of wealth (at least originally) from sectors that can be classified as “rent-thick” (real estate, construction, infrastructure or ports sectors, media, cement, and mining). The remaining 26 billionaires had drawn their primary source of wealth from “other” sectors (IT/software, pharmaceuticals and biotech, finance, liquor and automotives, etc). Overall, 43% of the total number of billionaires, accounting for 60% of billionaire wealth in India, had their primary sources of wealth from rent-thick sectors. Indian capitalism seems to have two faces. Does international experience provide a guide?

Click this link for the pdf version.

Made in Bangladesh: Unrest

Jim Yardley in NYT:

Ishwardi, Bangladesh — The air thickened with tear gas as police and paramilitary officers jogged into the Ishwardi Export Processing Zone firing rubber bullets and swinging cane poles. Panicked factory workers tried to flee. A seamstress crumpled to the ground, knocked unconscious by a shot in the head.

Dozens of people were bloodied and hospitalized. The officers were cracking down on protests at two garment factories inside this industrial area in western Bangladesh. But they were also protecting two ingredients of a manufacturing formula that has quietly made Bangladesh a leading apparel exporter to the United States and Europe: cheap labor and foreign investment.

Both were at stake on that March morning. Workers earning as little as $50 a month, less than the cost of one of the knit sweaters they stitched for European stores, were furious over a cut in wages. Their anger was directed at the Hong Kong and Chinese bosses of the two factories, turning a labor dispute into something potentially much larger.

“If any foreigner got injured or killed, it would damage the country’s image around the globe,” said a police supervisor, Akbar Hossein, who participated in the crackdown. “We all know the importance of these factories and this industry for Bangladesh.” More:

India’s emu farming scam

S. Ramesh in The Hindu:

When the first flock of emus — flightless birds native to Australia — landed at Perundurai in Tamil Nadu’s Erode district in 2006, they drew the attention of only curious onlookers. Then they drew the attention of investors, enabling firms and businessmen offering schemes on the birds to rake in huge money. Six years on, the emus and the investors have been left in the lurch and the businessmen have allegedly taken flight with the invested money as emu contract farming joined the list of dubious investment schemes after a few years of roaring business.

Perundurai, the hub of emu farms, is now crowded with anguished investors who swallowed the bait of big returns. A conservative estimate by district officials points to a scam worth Rs. 300 crore. But traders in the poultry business claim over Rs. 500 crore might have been lost in this business. The police have said Susi Emu Farms India Private Limited might have swindled investors of around Rs. 200 crore; most of these are from Tamil Nadu.

Promised staggering financial returns, more than 20,000 people invested in these firms. “People thought only about the financial returns. They did not think where this would lead them to,” said Lower Bhavani Farmers’ Association president S. Nallasamy.

In 2006, M.S. Guru, hailing from Perundurai, founded Susi Emu Farms and introduced a buy-back scheme that promised lucrative returns on investment in contract emu farming. For an initial investment of Rs. 1.5 lakh, he promised a return of Rs. 3.34 lakhs within two years. Under the scheme, the company provided investors three pairs of chicks on the payment of Rs. 1.5 lakh as caution deposit. More:


India’s only organic, fair trade coffee, grown by tribal farmers

Priya Ramani in Mint-Lounge:

It’s actually a story that has been developing since 2000, when the Naandi Foundation, of which Kumar is CEO, joined the effort to help the area’s tribal farmers convert semi-wastelands into organic coffee plantations. Now, the Araku Emerald brand is the country’s only organic, fair trade certified coffee.

Over the past few years Naandi has helped some 100,000 illiterate tribals who are part of an extremely successful cooperative society clamber out of poverty. Kumar says most of the children in the area now go to school. The initiative has come a long way from the early years when Naandi actually raised money to pay the local farmers wages to work their own fields until the coffee crop began yielding dividends.

It may or may not compete with the best stuff grown 2,000m up in the Nilgiris or in Karnataka’s BR Hills, but it certainly has the happiest backstory of any coffee brand in the country. “It’s a nice special coffee grown by a group of farmers who had been almost forgotten,” says Sunalini Menon, founder and CEO of Coffeelabs Pvt. Ltd, a Bangalore-based coffee consulting firm. Menon has just created a new limited edition blend of Araku Arabica.

From 25 July, Mumbai Monsoon will be sold at deGustibus Hospitality Pvt. Ltd’s Indigo Delis across the city at Rs950 for 200g. “It has lots of fruit nuances,” says Menon, who always sounds like she’s talking about wine, not coffee. Deli regulars are probably familiar with two other Araku brands—Red Earth (for the French press and a cappuccino) and Forest Trail (for an espresso)—that are already available on the menu and for sale. More:

City in a bottle: How Bangalore’s liquor industry has shaped its destiny

Raghu Karnad in The Caravan:

Long before information technology made Bangalore famous, alcohol was the city’s defining industry—shaping its identity for outsiders as well as residents. Though Bangalore is often called India’s “Pub Capital”, the pubs are just the frothy head on the pour.

Alcohol printed the city’s newspapers, produced its movies, put down hospitals and schools and sports teams—and ruled the men who ruled its people. It caused the worst medical emergencies, sweetened the long evenings and created the brands to which Bangaloreans feel truest loyalty. Yet Bangalore’s identity as a liquor city has always stayed in the realm of folklore. It has never been recognised in urban histories, only in jokes and in its hazy self-image as a town of “guzzlers”.

The city of Bangalore was born divided, as a colonial Cantonment and a native city, white and black twins. From the start, they had a divided drinking culture, of “foreign” and “country” liquor; alcohol has helped define the city’s split identity ever since. After the British left, the two halves of Bangalore were merged. They came together like two strangers with their backs to each other, not knowing whether to embrace or wrestle. As the two cities grappled, so did the two liquor industries.

This is the story of how beer, arrack, rum and whiskey—and the companies that made them—irrigated the growth of Bangalore from a quaint colonial outpost to a regional capital, and onwards to the promised land of the globalisation era. Between the 1950s and the 1970s, country liquor reigned, and its profits patronised a surge of cultural pride in the capital of a newly unified linguistic state. In the 1980s, beer and foreign liquor broke the ranks of country liquor, pouring out across the city from the former Cantonment. As a new consumer economy arose in the 1990s, foreign liquor seized the chance to name and claim city institutions. The battle of booze made the city, and today we drink inside the victor’s castle.

Right here is where the story begins. The ground now pressed under the mass of UB City was once the site of the Bangalore Brewery, which opened to ease the thirsty work of maintaining the British Raj from a remote, inland hold. In 1807, a small imperial garrison near the native pete (settlement) of Bangalore was expanded into a full Civil and Military Station. Similar cantonments were being built across the subcontinent, but the Bangalore Station was an especially powerful symbol, built on the site of a major battle, very soon after the defeat of a defiant ruler, Tipu Sultan.

The native “City”, to the west, was a dense, unplanned commercial cluster, filled with the clatter of silk and cotton looms and the vapours of cowdung. The “Cantt”, to the east, was a wide, spacious sprawl of parade grounds, church spires, barracks and bungalows, with great spaces given over to equine sports, like the racecourse and polo grounds. But Cantt and City were not only different, they were strictly separate. The border between them was topographic, administrative and, obviously, ethnic. The British troops, settlers, Anglo-Indians and Eurasians in the Cantt were served by an imported population of Tamilians and Telugu-speakers. To avoid being dependent on the native population, labour was never sought from the City. So the two areas remained aloof and mutually suspicious, until long past the end of British rule. More:

The moral dilemma

With no regard for ethics, Indians may well succeed, but India will not. Is that what we want, asks Subroto Bagchi in Forbes India. 

Subroto Bagchi
The Man:
 Up until March, when he was made the chairman of Mindtree, Subroto Bagchi had one of the coolest job titles in the whole of IT industry—gardener. His role was to nurture the top 100 leaders of Mindtree, a company he co-founded with eight others in 1999. He says the only way you can get obedience and compliance is on a platform of morality.

The Oeuvre: Wrote four books, each one of them spelling out rules for success, drawing on the lessons from the lives of professionals and entrepreneurs. He also writes the hugely popular column Zen Garden for Forbes India. more

The Bofors story, 25 years later…

In The Hoot, Sten Lindstrom tells Chitra Subramaniam-Duella on why he chose to turn whistle-blower

April 2012 marks the 25 anniversary of the Bofors-India media revelations, which began on April 16, 1987 with revelations on Swedish state radio. The Hoot presents an interview with the man who decided to leak over 350-documents to former Indian journalist Chitra Subramaniam-Duella, then with The Hindu and later with The Indian Express and The Statesman. The documents included payment instructions to banks, open and secret contracts, hand written notes, minutes of meetings and an explosive diary. They led to the electoral defeat of an Indian prime minister and blew gaping holes into a Swedish prime minister’s record as a champion of peace and disarmament. Above all, they formed the basis for the first ever transfer of secret bank documents from Switzerland to India.  more

Obama’s insourcing drive is not good news for India

Samar Halarnkar in Hindustan Times:

It may be hard to believe, but the US once tried to stop its citizens from drinking alcohol. During this age of prohibition in the 1920s, a time of gangsters, rum-runners, bootleggers and general chaos, a little five-man company called Master Lock was born in the city of Milwaukee.

Federal authorities were locking bars and clubs, and they needed padlocks that could not be easily broken. Master Lock supplied government agents with these locks, laminated bank-vault-like layers of solid steel, unlike the hollow locks of the period. Today, Master Lock (2010 sales: $3.2 billion) is the world’s biggest manufacturer of padlocks, building global markets from outsourced factories in Asia, particularly China.

Recently, Master Lock took away 100 jobs from cheap Chinese contract labour and brought them back as full-time union jobs to Milwaukee. Now, when more than 12 million people are unemployed in a superpower wracked by self-doubt and witness to the death of full-time blue-collar, unionised employment, 100 new jobs appear insignificant.

Yet, the underlying trend that created these jobs should worry India (and, of course, China). Master Lock’s returned jobs have become something of a cause célèbre for US President Barack Obama. More:

Narayana Murthy among greatest entrepreneurs: Fortune


Infosys co-founder N R Narayana Murthy is among the 12 “greatest entrepreneurs of our time” according to a Fortune magazine list that is topped by Apple’s late chief Steve Jobs.

It includes Microsoft founder Bill Gates and Facebook CEO Mark Zuckerberg for turning “concepts into companies” and changing the “face of business”.

The US publication said as the “visionary founder” of Infosys, Murthy has built “one of the largest companies in India, helping to transform that economy and put it on the world stage”.

Murthy, 65, proved that “India could compete with the world by taking on the software development work that had long been the province of the West.” More:

India’s newest export: Whiskey

Shivani Vora at India Ink / NYT:

Tony Bedi, president of the UB Group in the United States, says that the company wants to sell Royal Challenge in areas where there are large Indian communities, and he plans to expand sales to Houston and parts of California. Besides Indians like my father, who are sentimental about Royal Challenge because they think of it as the brand from back home, the liquor has found unexpected fans in the Caribbean community in Queens, because of the Royal Challengers Bangalore cricket team in India, named for the liquor. “The biggest interest in the whiskey has come from the Caribbeans who love cricket and associate it with the sport,” said Mr. Bedi.

The Royal Challenge brand has existed for more than 100 years, though United Breweries bought it in 2005 from Indian liquor manufacturer Shaw Wallace & Company. In the United States, a bottle sells for between $14 and $17, slightly higher than the 500 to 600 rupees it goes for in India. United Breweries produces 1.4 million cases of it annually, which is sold mostly within India but also in parts of the Middle East. The number is small compared to the 19 million cases of Bagpiper it produces annually, which is India’s highest-selling whiskey, but the company considers Royal Challenge a more premium brand. More:

Fabindia, that byword for casual Indian chic, falls for Gallic charm

Sadanand Menon in Outlook:

As a dedicated, unpaid mannequin and clothes-horse for Fabindia the past twenty-something years, I think I have earned a right to complain. The past few days I’ve been anxiously holding up my kurtas to check if the label has mutated into Fabinde—with a stylish French acute over the ‘e’.

The news is that Wolfensohn Capital Partners (WCP), the Mauritius-based company owned by former World Bank president James Wolfensohn, which had bought eight per cent shares from the unlisted Fabindia in 2007, has last week divested these shares to L-Capital, the private equity front of Louis Vuitton Moet Hennessey (LVMH), a portmanteau company created out of a heady cocktail between the LV brand of ready-to-wears and travel accessories with the cognac and champagne majors Moets, Chadron and Hennessy.

In the era of corporate cannibalism, crisis hits complacent consumers in not a few complicated ways. The $283 million brand Fabindia, a household name for desi, ethnic apparel and accessories, blowing this quiet French kiss at the $19 billion luxury goods conglomerate Louis Vuitton—the world’s 29th most valuable brand—triggers an alarm in the mind of a Fabindia junkie like me, conjuring up the spectre of being unwittingly recruited as a Trojan Horse for some faceless videshi brand. More:

The business of love

Anindita Ghose in Mint:

Siddharth Mangharam met his wife of three years, Simran, at a party in Bangalore over a platter of Roquefort. “Most couldn’t stand its pungent flavour but there was one attractive woman who, like me, was really enjoying the sharp cheese,” says Mangharam. “That got us talking for a whole hour about our shared passion for cheeses. This serendipitous interaction led to us ultimately getting married a year later.”

Mangharam, 37, is now in what he calls the “business of catalysing serendipity”. A business management graduate whose first start-up, Peek, is into cloud computing, his second helps educated, urban singles connect with each other. Mangharam, CEO, Floh (Find Life Over Here), co-founded the singles network in May with Simran and two other partners to address the gap in premium dating and matrimonial services in India.

The model works like this: Members recommended by existing members enter the network (, and groups of 15-20 singles are “curated” for themed events such as vintage car rallies or wine tastings. Based in Bangalore—with plans to expand to other cities in India—the nine-month-old start-up has a revenue model based on subscription and event fees. Floh has a few hundred members in its network already, while more than 2,000 are on waitlist.

In March, when the New York-based “group dating” start-up set up offices in India to handle unprecedented traffic from the country, it highlighted a niche market that was waiting moony-eyed at the altar to be addressed. Founded in 2008 by three 20-something men who’d sought to set their dating website apart by enabling members to set up group dates, they’d unknowingly hit a bumper market with India. By 2010, they had over two million Indian users. While the safety-in-numbers idea of going out with a group of strangers of the opposite sex hadn’t found too many takers on home ground, it had sparked in India. More:


Starbucks coming to India

Fron Economic Times:

Starbucks Corp will open its first coffee shops in India in August or September, a year later than originally planned, and aims to have 50 outlets by year-end through a tie-up with the Tata group, the country’s biggest business house.

The Seattle-based chain, known as much for the trendy urban lifestyle it represents as its costly cups of coffee, enters a market with a fast-growing middle class and plenty of competition in the small but fast-growing coffee segment.

Starbucks had initially planned to have its first cafes in India open by mid-2011 but was delayed by difficulties in acquiring real estate and high land costs, a common problem for chain stores in a country where more than 90 percent of retail is conducted at one-off mom-and-pop shops. More:

And Reuters report in Chicago Tribune

While India is traditionally a nation of tea-drinkers, young urban professionals of the sort that work in modern offices and frequent the shopping malls that are sprouting around its cities have embraced western-style cafe culture — and prices.

Cafe Coffee Day, a home-grown brand that is India’s largest coffee chain, has nearly 1,200 outlets and plans to open one cafe every third day.

No.2 player Barista, owned by Italy’s Lavazza, has more than 200 cafes. UK-based Costa Coffee, which entered the market in 2008, has about 75 stores and is growing quickly.

Ambani family reunion

From Economic Times:

CHORWAD, GUJARAT: For a night and two days this week, Chorwad might have been the most unequal place on earth. By itself, this is an unremarkable Saurashtra coastal village, which was under the rule of the Nawab of Junagadh, Muhammad Mahabat Khanji III Rasul Khanji, till independence.

Had it not been for Dhirubhai Ambani’s birth, a quiet beach and for a road between pilgrimage hotspots Somnath and Dwarka that passes through here, there is little to Chorwad that merits mention. But as Dhirubhai’s two sons came to stay in their ancestral house for a historic family reunion, the per capita income distribution of the town got so skewed that it inevitably drew attention to the conditions of the locals.

The choppers, big cars and the small army of private security all stood out in sharp contrast with the rickety chakdas (a carriage attached to an old Royal Enfield engine, a popular, and polluting, mode of local transport), cow-dung littered streets and a subsistence fishing community with little modern equipment. More:

The retail counter-revolution

Economist C.P. Chandrasekhar in The Hindu:

The power of these chains has been amply illustrated in other contexts, where they have been in operation. With deep pockets and international sourcing capabilities, they exploit economies in procurement, storage and distribution to outcompete and displace domestic intermediaries in the supply chain. This occurs not in one or a few centres, since each retail chain tends to establish procurement, warehousing and distribution facilities across regions and cities. Once the smaller middlemen are displaced, we have a few large firms and their agents dealing with a multitude of small, medium and relatively large producers on the one side, and a mass of consumers, on the other.

The relationship with producers is that of an “oligopsony,” with a few buyers and a large number of sellers. With consumers, it is one of an “oligopoly” with few sellers and a large number of buyers. Structurally, this provides the basis for an increase in margins at the expense of prices paid to producers or charged to consumers. The new “middlemen” appropriate these higher margins. That a part of the margin may be shared with the producer or consumer to increase retail volumes and market shares does not take away from the fact that the distribution of power within the supply chain benefits the large intermediary. In the medium term, it is the dominant position of these large players that would influence the size and direction of margins. More:

How the Tatas found an heir

Ashok V. Desai in The Telegraph:

As India grows and gets closer to the world, it is being indoctrinated into the mores of the Western world. Corporate governance belongs to them. We must have ever more wordy companies acts, backed by even more voluminous rules; ministries create numerous regulators to accommodate retired bureaucrats; to show that they are at work, the regulators create work for the private sector. As if that were not enough, there are dicta on corporate governance, sanctified by the rites of corporate social responsibility. Big corporate houses feel obliged to show that they are followers of this new managerial religion. So the Tatas went through the rigmarole of appointing committees, held consultations and made a great show of their search for a successor to Ratan Tata. After looking at the best executives at home and abroad, whom did they select? Cyrus Mistry.

The Gujarati (and Marathi) practice of using one’s father’s first name as one’s second name has died out in the present generation, but in old times, Ratan would have been known as Ratanji Navalji Tata. He was not the only possible successor to Jehangir Ratanji Dadabhoy Tata, who came to be known as JRD. But lacking an heir, JRD chose Ratan, son of Naval Hormusji Tata, brother of Jimmy (a colloquial version of Jamsetji) and half-brother of Noel (a modernized version of Naval). Ratan’s father, Naval, was adopted by Navajbai, who was left childless when Sir Ratan Tata, her husband, suddenly died in 1918.

Nusserwanji Rustomji Tata migrated from Navsari to Bombay in the 1840s. He was the first businessman in the family of Tatas, a surname which means priests. He set up an agency in Hongkong in 1959 in partnership with Kaliandas and Premchand Roychand; they sold Indian opium and bought Chinese tea for export. His son, Jamsetji, bought a bankrupt oil mill in Chinchpokli in Bombay in 1869, turned it into a highly profitable cotton mill, and sold it after two years. Then he set up another cotton mill in Nagpur in 1874. He went on to build the steel mill in Jamshedpur and the Taj Mahal Hotel. More:

Philippines overtakes India as hub of call centres

Vikas Bajaj from Manila in NYT:

Americans calling the customer service lines of their airlines, phone companies and banks are now more likely to speak to Mark in Manila than Bharat in Bangalore.

Over the last several years, a quiet revolution has been reshaping the call center business: the rise of the Philippines, a former United States colony that has a large population of young people who speak lightly accented English and, unlike many Indians, are steeped in American culture.

More Filipinos — about 400,000 — than Indians now spend their nights talking to mostly American consumers, industry officials said, as companies like AT&T, JPMorgan Chase and Expedia have hired call centers here, or built their own. The jobs have come from the United States, Europe and, to some extent, India as outsourcers followed their clients to the Philippines.

India, where offshore call centers first took off in a big way, fields as many as 350,000 call center agents, according to some industry estimates. The Philippines, which has a population one-tenth as big as India’s, overtook India this year, according to Jojo Uligan, executive director of the Contact Center Association of the Philippines. More:

Cyrus Mistry to replace Ratan Tata

In Economic Times:

Cyrus Mistry, son of Pallonji Mistry, Tata Sons’ largest individual shareholder, will succeed Ratan Tata as chairman of the $83-billion (over Rs 4.30 lakh crore) group after a high-profile global search ended with the selection of the second youngest leader in the group’s 143-year history.

Reclusive, low-profile and little known outside the construction business, Cyrus Mistry was the surprise choice of the Tata Sons selection committee which plumped for the construction tycoon and overlooked the claims of Noel Tata, Ratan Tata’s half-brother and Cyrus’ brother-in-law. More:

And in Mint: Surprise pick

Who is Cyrus Mistry?

In Mint: He is low-profile, given to details, doesn’t socialize much, is a foodie and seems to be interested in golf, although he doesn’t play much.

The day after his surprise appointment as the designated successor to Tata group chief Ratan Tata, Mumbai and India woke up to the truth that no one really seemed to know much about Cyrus Mistry.

A Tata in all but name

The Outsider

Suketu Mehta, journalism professor and Maximum City author, interviews Raj Rajaratnam in Newsweek. From The Daily Beast:

Raj Rajaratnam

It was 6 a.m. on Oct. 16, 2009, and Raj Rajaratnam, head of the Galleon Group hedge fund, was at home on his exercise bike looking out over Manhattan’s Turtle Bay, thinking about how many shirts he would have to pack for his trip to England that day. He was to go there to launch a $200 million fund to invest in the Sri Lankan stock market, in which he, the richest Sri Lankan on the planet, was the biggest single investor.

At 6:30 his doorbell rang. He answered it to find a number of policemen and men in suits outside. An FBI agent named B. J. Kang told him he was under arrest for insider trading. There were five other agents with him, come to collect Rajaratnam. They asked if he had a gun, if he had drugs on the property. For a moment he was afraid they would plant something.

As they led him away from his family, Rajaratnam says Kang told him, “Take a good look at your son. You’re not going to see him for a long time.” He added, for good effect, “Your wife doesn’t seem so upset. Because she’s going to spend all your money.”

The interrogation, at the FBI office in lower Manhattan, lasted eight hours. They put a laptop in front of him and pressed a button. He heard the voice of his wife picking up his home phone. “Hello?” Then they clicked on another button and his voice came on, on his cellphone, talking to his Wharton classmate and friend Anil Kumar, discussing business matters at McKinsey, where Kumar worked. On the same day, Kumar and another Wharton classmate, Rajiv Goel, were charged with insider trading.

Two FBI agents, wearing prominently displayed guns, played good cop, bad cop. They thumped tables, jumped up and down, told him, “Just say you did it to one count!” But the suspect—who chose not to call a lawyer—was uncooperative. “In my head I was saying, ‘You can’t intimidate me! I’m from Sri Lanka’?”—where prisoners have to deal with much worse. They wanted him to turn in other hedge-fund managers. They wanted him, especially, to wear a wire and tape his conversations with Rajat Gupta, the former CEO of McKinsey. Gupta, whom Rajaratnam refers to as a “first-class guy,” was the most respected Indian executive in the U.S. More:

In Karachi, new aspirations to be a global player

From NPR:

Karachi’s population has grown to more than 13 million. On a recent visit, a trip down a tree-lined avenue showed how times have changed for the city, from when it last attempted to assert itself on the global level.

Our guide is “Tony” Tufail Shaikh, an entertainer, entrepreneur and onetime waterfront developer in Karachi. He’s driving through an upscale district of consulates, hotels and historic mansions from British colonial times.

It’s also a district with a security problem. Gunmen stand at many gates to protect the occupants, prompting the question of whether there were always so many guards in the city.

“No way,” Shaikh says. “One time, the city was full of life. People could walk on the street at 4 o’clock in the morning; the gates were open, there were no guards.”

This city has changed since the 1970s, when it seemed to have a brighter future.

We can trace that change by learning the story of a single piece of beachfront property that Shaikh once owned. His vision was to attract global elites by turning Karachi into an entertainment capital in the late ’70s.

It would have been anchored by a 100,000 square-foot casino. More:

The return of the Lab

Dozens of Indian researchers working in biological sciences abroad are heading home to India. Is biotech India’s next IT? V Shoba in The Indian Express:

Subba Rao Gangi Setty spends much of his time in a small cabin with an old fan whirring above. After arriving in Bangalore in July last year, the cell biologist has set up a lab at the Department of Microbiology and Cell Biology in the Indian Institute of Science to study a disease called the Hermansky-Pudlak Syndrome (HPS), a type of albinism. One of a handful of senior fellows supported by a joint funding programme of the Wellcome Trust, UK, and the Department of Biotechnology, Government of India, Setty, a Green Card holder, returned to a much lower salary and an un-airconditioned office so he could pursue science in India. “I went to government schools and studied on government scholarships. I felt I owed it to my country to come back and do quality science here,” says the 37-year-old from Porumamilla village, Kadappa district, Andhra Pradesh, who spent over a decade in the US—long enough that he now rolls his r’s.

Raring for a change after nine years at the University of Pennsylvania in Philadelphia, US, Setty began looking out for opportunities in the biotech industry in 2009. The recession was setting in at the time, but with two Nature papers and several other high-quality publications to his name, he found work at Proteostasis Therapeutics, a small molecule drug company in Boston. For a year, he worked on modulation of cell biological pathways to cure protein folding defects implicated in neurodegenerative diseases. “It was then that I learned about the Wellcome Trust-DBT fellowship. I had been eager to come back to India since 2006, but now, an opportunity presented itself,” he says. More:

The Wellcome Trust/DBT India Alliance

Criminal charges for Rajat Gupta, ex McKinsey Head

From the New York Times:

United States prosecutors are expected to file criminal charges Wednesday against former McKinsey head Rajat K. Gupta, in connection with the Galleon Group insider trading case, The New York Times’ DealBook reports.

Mr. Gupta, 62, “has been under investigation over whether he leaked corporate secrets to Raj Rajaratnam, the hedge fund manager who was sentenced this month to 11 years in prison for trading on illegal stock tips,” DealBook said.

The charges would mean “a stunning fall from grace of a trusted adviser to political leaders and chief executives of the world’s most celebrated companies.” More:

The background story in Bloomberg: Gupta, 62, led McKinsey, the global consulting firm, from 1994 to 2003. He sat on the boards of some of the largest multinationals, including Goldman Sachs and Procter & Gamble Co. He raised millions of dollars for charity, hung out with the Prime Minister of India, and attended President Barack Obama’s first state dinner at the White House. He divided his time between a waterfront home in Westport, Connecticut, that once belonged to J.C. Penney, a Manhattan apartment, and a Florida getaway.

Rajat Gupta pleads not guilty in insider trading, released on $10 mn bail

Statement houses for Mumbai’s super-rich

Why hasn’t India’s richest man, Mukesh Ambani moved into his 27-story house, asks Vikas Bajaj in New York Times

When the richest man in India completed his extravagant 27-story house here last year, it incited a public debate along the lines of “What’s he trying to prove?”

Now, the chatter involves a different question: Why hasn’t he moved in?

The owner, Mukesh Ambani, and his spokesman have declined to discuss the matter, leaving plenty of room for theories. One popular explanation is that despite the time and money lavished upon it, the building does not conform to the ancient Indian architectural doctrine known as vastu shastra. (More on that below.)

Certainly the home — which is called Antilia and according to Indian news reports has three helipads, six floors of parking and a series of floating gardens — looks lived in. more

And, also in New York Times, Neha Thirani on Mumbai’s new status symbol among the super-rich: an apartment building of their own

Not far from Mukesh Ambani’s 27-storey tower, Antilia, a competing skyscraper is making its way into Mumbai’s skyline.

The building is being built by the Singhania family, which controls the Raymond Group, the ubiquitous Indian suit maker. Seen at a distance, the two buildings are strikingly similar.

They both have soaring columns, large sea-facing windows and a nearly identical jigsaw puzzle facade. They have a similar sense of scale and emphasis on grandeur. In a city where space is considered the biggest luxury, both buildings seem to be advertising their exclusivity. more

The modern face of insider trading

The sentencing of Raj Rajaratnam for insider trading marks the denouement in an extraordinary fall from grace. In Wall Street Journal, Susan Pulliam and Chad Bray have the story.

Raj Rajaratnam’s remarkable journey from Sri Lanka to the heights of the hedge-fund world to felon ended Thursday when he was sentenced to 11 years in prison, the longest-ever term imposed in an insider-trading case.

In a defining moment for the government’s campaign to stamp out what it describes as rampant illegal trading on Wall Street, U.S. District Judge Richard Holwell in New York said during sentencing that the billionaire investor’s crimes “reflect a virus in our business culture that needs to be eradicated.” The judge also ordered Mr. Rajaratnam, who was convicted of securities fraud and conspiracy in May, to pay a $10 million fine and forfeit $53.8 million. The defense plans an appeal. more

Karachi to Bombay to Calcutta: The struggle to start Air-India

J.R.D.Tata’s aviator’s certificate issued by the Federation Aeronautique Internationale, British Empire bearing “No.1” dated February 10, 1929, by The Royal Aero Club, The Aero Club of India and Burma, and the Associated Royal Aero Club of Great Britain.: Image: Tata Central Archives

David Shaftel at Smithsonian Air & Space Magazine:

Like many things in India, civil aviation was subservient to the monsoon. Since the rains, which begin mid-June, have typically abated by early September, the subcontinent’s first regularly scheduled airmail service was to have been inaugurated on September 15, 1932. But that year, the rain and lashing wind persisted, making the Juhu airfield, Bombay’s first airport, a quagmire. In those days, the field was little more than a dried mud flat on the Indian Ocean coast, north of what was then the city center, and in what is now the hub of India’s famous film industry, Bollywood. It took another month before the airfield dried out enough to permit the first flight of the new service, a venture that would grow into Air-India, the national carrier.

That it started at all was due to the persistence and vision of a tycoon and adventurer named J.R.D. Tata. In 1932, the 28-year-old industrialist cut a dashing figure. With his tidy mustache, trim frame, and pomaded hair, he looked like Errol Flynn. Finally, in October, after three years of lobbying the British colonial government, Jehangir Ratanji Dadabhoy Tata, known to millions of Indians today as J.R.D., boarded a second-hand Puss Moth at Drigh Road airport in Karachi (in what is now Pakistan) for the flight to Bombay. Equipped with only a pair of goggles and the slide rule he used for navigating, J.R.D. took off with 120 pounds of mail. He stopped as planned in Ahmedabad, the halfway point in the 600-mile journey. “I was fuelled by Burmah Shell out of 2 gallon tins brought to the airfield in a bullock-cart,” J.R.D. remembered, according to materials in the Tata archives. “My only thought was to be on my way as quickly as possible so as to reach Juhu on schedule…and I managed to take off after 20 minutes in Ahmedabad after a lemonade and a brief talk to the press.”

The flight to Bombay (today, Mumbai) was “bumpy and hot” but otherwise uneventful, except for what an internal Tata Group review of the founding of the airline describes as the “killing of a bird which flew into the cabin of his machine.” More: