Lakshmi Mittal, who heads the worldâ€™s largest steel manufacturing conglomerate, has no business interests in India. Yet, his failed attempts to buy Arcelor, the European steel-maker, are followed closely in his country of origin.
As Indian entrepreneurs spread their wings outside the home country, as a natural corollary to a liberalised economy that is growing at an impressive eight per cent clip, they are coming up against resistance â€” enough for ministers in New Delhi to hurl accusations of protectionism, if not racism. Commentators see this phenomenon as a manifestation of the inability of erstwhile colonial powers to come to terms with the resurgent economies of developing countries.
The running spat between Mittal and the Luxembourg-based Arcelor, the second-largest steel producing groups in the world, grabbed headlines recently after the board of directors of Arcelor rejected an improved bid by Mittal Steel. In January, Mittal had made an unsolicited offer to buy out controlling interests in Arcelor, which has a presence in several European countries including France. After it became clear that Arcelor was not going to relent to the Mittal Steel buyout offer of $23.8 billion, Mittal Steel raised its offer to around $33 billion.
The rejection by the board of the new offer has left behind a trail of questions relating to protectionism, shareholder interests and racism. But by rebuffing Mittal and referring to his Indian roots, Arcelor has made him a folk hero in India despite the fact that, so far, he has only promised to invest in the iron ore-rich state of Jharkhand in eastern India. On more than one occasion, Indiaâ€™s commerce and industry minister Kamal Nath has publicly hinted that racist discrimination could be behind the rejection.
Last week, EU gave the Mittal bid a green signal. The Economist magazine argued that it made far more business sense for Arcelor shareholders. â€œSeverstal has similar assets to Arcelor, but Mittal has a more extensive distribution network, a wider geographic reach and more market power.â€
Sunil Jain, associate editor of Business Standard, a leading multi-edition financial newspaper in India, said that middle-class Indians are â€œvery proudâ€ of the achievements of persons of Indian origin, even if these individuals have little connection with the home country. â€œItâ€™s the Kalpana Chawla syndrome â€” her death was mourned in her native Haryana state although she had left the province many years earlier,â€ he remarked, referring to the NASA astronaut who died in the â€˜Columbiaâ€™ space shuttle disaster in February 2003.
Indiaâ€™s commercial relations with France were strained recently after the flamboyant Vijay Mallya offered to buy Taittinger. The French were upset with the idea of an Indian controlling a company that is part and parcel of popular French history. Taittinger was finally sold to a French regional bank for $849 million, against Mallyaâ€™s offer of $750 million. There are other deals where race and nationality have stalled sound business propositions. â€” IPS