It was November 2001. Anil Manibhai Naik, who had taken over as the CEO & MD of Larsen & Toubro a couple of years earlier, was in Chicago on work. At 1.30 am, he got a call that set off alarm bells.
“Naikji, you did not come to us, but we are coming to you," said Kumar Mangalam Birla, chairman, Aditya Birla Group. Both Kumar Birla and his father, Aditya Vikram Birla, had been trying to recruit Naik from L&T for many years. By picking up Reliance Industries Ltd’s 10.5% stake in the company, Birla was looking to ultimately acquire L&T itself.
Ironically, Reliance had acquired the L&T shares as a white knight, when it swooped in to rescue the company from a hostile takeover by Manu Chhabria in the late 1980s. Chhabria, a flamboyant non-resident Indian who had made a fortune in West Asia through his electronics trading activity, had used his wealth to acquire high-profile listed entities in India, including Shaw Wallace and Dunlop.
What followed in the next few months was a battle of wits, in which Naik emerged triumphant, but no one lost. Naik, who took pride in the freedom that the company enjoyed by being independent and not part of any family group, decided to fight. Chartered accountant and corporate advisor S.Gurumurthy came to his aid. Meetings were held with then prime minister Atal Bihari Vajpayee, deputy prime minister LK Advani and defence minister George Fernandes. When the Birlas’ stake (they were buying shares in the open market) crossed 16%, then finance minister Jaswant Singh asked them to stop buying.
Even as the battle raged publicly, Naik kept lines of communication open with the Birlas. This helped him understand that they were more interested in L&T’s cement assets. He then came up with a plan. Naik offered the Birlas the cement business, and they, in turn, sold their stake to a trust that was set up for employees of L&T.
Esta historia es de la edición March 22, 2023 de Mint Mumbai.
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