When one coup fails, try another. Bengal Tigress Mamata Banerjee failed to oust Pranab Mukherjee from being the UPA’s nominee for the President of India, but her state government has pulled off a compensatory corporate coup instead back home.
In a boardroom coup on Tuesday, Mamata’s Industries Minister Partha Chatterjee wrested control of the managing directorship of Haldia Petrochemicals Ltd (HPL) from The Chatterjee Group (TCG), the private partner in the venture.
As The Telegraph reports it, the TCG-nominated managing director (MD), Partha Bhattacharyya, a former Coal India Chairman, threw in the towel due to the constant squabbling between the two promoters of Haldia Petroclem: the state government and TCG.
So at a board jaw-jaw session on Tuesday, when TCG owner Purnendu Chatterjee had temporarily left the meeting to attend to a private conference call, the rest of the directors suddenly accepted the MD’s pending resignation and appointed their own nominee in his place: former state transport secretary Sumantra Choudhury (Read the full Telegraph story here).
Says the newspaper: “The alacrity with which the resignation was accepted and the new appointment pushed through is expected to be challenged in court, adding another chapter to the litigation-bound project that was once a showpiece investment trophy.”
Haldia Petrochem was started by the Left Front government which decided some decades ago that it needed a trophy petrochem project in the state. But the Left was never comfortable with its private partners, and was constantly scrapping with them over many issues.
To be sure, Haldia isn’t exactly the crown jewels. In Bengal’s industrial wasteland, which Manata Banerjee did little change, having herself driven the Tatas out of Singur, Haldia Petrochem is another huge lossmaker: its accumulated losses are over Rs 1,100 crore, and the company has mortgaged its underpants to various bankers.
This is what helped the Bengal government execute the coup neatly. Despite having a large private promoter in TCG, the board is dominated by representatives of the WB Industrial Development Corporation and bankers to whom the company owes money. Which is why when TCG’s Purnendu Chatterjee left the meeting, the rest of the board ganged up and changed the managing director.
The matter will surely end up in court. But whatever the final outcome, one thing is certain: the Mamata government’s coup is not going to endear it to businessmen of any hue.
She may be battling the centre for a Bengal bailout package, but her government’s anti-business behaviour ensures that no private businessmen will risk offering her a job-creating package in a state starved of investment and employment opportunities.