Why CIL price rollback is like robbing poor children
TCI, the foreign investor that threatened Coal India with legal action for rolling back coal prices, is actually using a part of its profits to help children in poor countries.
Little did Alok Perti, Coal Secretary, and NC Jha, erstwhile Chairman of Coal India, realise that their act of rolling back coal prices could lead to children across the globe sleeping on an empty stomach. Including some in India.
In a missive sent in January, the coal secretary had asked Jha to reduce coal prices, which the latter happily obliged, making it his last contribution to the company before retirement. However, they were caught in the act by The Children's Investment Fund (TCI), the second-largest shareholder of the company after government of India.
TCI has threatened Coal India directors with legal action if they sacrificed minority shareholders interests on government orders.
TCI, managed by shareholder activist Chris Hohn, gives away a part of his fund's profits to a non-profit organisation founded by him under the name of The Children's Investment Fund Foundation (CIFF). This NGO is co-funded by the Bill & Melinda Gates Foundation, The Diana, Princess of Wales, Foundation, and the Elton John Aids Foundation among a score of other funding partners.
CIFF's main focus is helping children in Kenya, Uganda, Malawi, Ethiopia - and India - who have been, or are at a risk, of being orphaned by Aids. In Africa, it is also helping with agriculture, training mentors and supporting education initiatives. It is one of the largest charities in the United Kingdom.
In the world market, TCI has carved its reputation as an activist fund. It has been responsible for the ouster of one chief executive and two chairmen of Deutsche Borse, in which it was an investor. TCI was also responsible for scuttling the German Exchange operator's attempt to buy the London Stock Exchange.
The fund, which was a shareholder of both Mittal Steel Company and Arcelor, sided with the Mittals in the takeover battle for the latter, but made the Mittals pay a much higher price for the acquisition.
Given TCI's track record, Coal India and the government of India will face strong shareholder activism if the government tries to arm-twist Coal India to do things that are not in minority shareholders' interest. About time too. Looks like the government's plan for asking Coal India to buyback the government's share will also face legal action.
Google had recently launched Project Loon, which aims towards bringing access to the Internet in the more underdeveloped parts of the world. If this seems
Mixed versions have emerged from government and The Children's Investment Fund on what transpired in the meetings over Coal India.
Hedge fund TCI is looking to the Colliery Control Order of 2000 for ammo to fight Coal India's board on pricing.