Jul 01, 2005 11:34 PM
9322 Views
(Updated Jul 02, 2005 12:04 AM)
There are some things you just cannot do, no matter who the hell you are and no matter how honorable your intentions are. The list includes many-a-thing like pinching Jenniffer Lopez’s behind, which in no way an honorable thing to do is still something you just cannot do. Anyways…..this little piece is dedicated to one such advertisement. The Rajnigandha ‘Indians are not for sale”.
Merger/Demerger/Amalgamation—. You just cannot choose a life-partner for your best friend without his consent, can you? Same way, you just cannot restructure a company by amalgamating or buying another subsidiary just because you think “Indians are not for sale”. You do that, and the Company’s act will subMERGE you in the Indian Ocean the next day. You gotta go through proper formalities…..According to Section 81 of the Companies Act, 1956, you have to make an application to the Registrar of the Companies Act atleast one month before the proposed demerger or amalgamation for further issue of capital.
You have to calculate the Net Assets minus the Net Liabilities of the amalgamating company, and deduct it from the Purchase Consideration the other company is offering to buy you out. The resulting Goodwill or Capital Reserve you have to distribute among your Equity Shareholder’s.
You have to tell your creditors, you gonna sell the company. And have to either pay them off or obtain a NOC from them that they will agree to accept money from the new company. You cant just bloody sell your company, just because the guy at the other end multiplied the purchase price you were offering to buy his company for, by 3 and now intends to buy your company. The above sarcasm is for the guy selling the company at a moments notice…..who makes a decision to sell his company so fast, you’d think he was making a decision of what to have for dinner.
As for you ‘Mr.Hot-shot-who-believes-Indians are not for sale’, Havent you ever heard of something like Board of Directors or atleast the Registrar of Companies. Did you file an application with them, for intending to buy a existing company? Did your technical staff estimate its profitability, goodwill, assets, liabilities and future growth? Did you take into account its finanacial ratios such as ROE, ROCE, N.P, Debt/Equity, Asset/Turnover. Nah…..you just popped a spoon of Rajnigandha in your mouth, and multiplied the other partys figure of $10,00000 by 3 and returned it to him….and managed to mutter chewing supari “Indians are not for sale”
And Mr.Bald CEO on the other end, takes a look at $10,00000 X 3, and shakes hands with you. Mr.Bald CEO…..do you own the bloody company??? who’s gonna talk with your creditors? Did you hold an Extraordinary General Meeting signifying the intention to sell your company? Did you take into account the Debenture holders? The preference share holders? The Registrar of Companies which is the mai-baap of all you CEO’s? Did you calculate how the Purchase consideration is going to be distributed among the shareholders?
Nah….you just shook hands, sold your company in a minute to Mr. Rajnigandha-chewing-proud-Indian and went home to your wife waiting for you who asked you “So hubby of mine, did you buy that company out today”? Mr. Bald CEO-no-more answers “No darling, but I sold my company to him”. And his wife would say “Okay, so do you want mayonnaise on your salad”
Being a CA student, I know that when you have a case of a company buying another one out……… I spend a good 45 minutes over a single sum provided they’ve got no crossholdings or cross transactions.........if they have got cross transactions or crossholdings....they 45 minuite figure could well be easily surpassed. And this Godforsaken deal of 30,00000 $…..which was not at all intended…..is over even before I can spread ketchup evenly over a single slice of pizza.
This Ad is a total piece of crap and if this is the state of the future Indian Advertisement business or even the Indian entrepreneur, who wont even sell a loss-making company to a successful business venture even though the proposition is a financially viable one just because he maintains the belief that “Indians are not for sale”……..I forsee a future where Indians-definitely-wont-be-on sale, but India sure will be.
I know this review was too technical with Company law and stuff, but Ad's like this dont anger me, they irritate me like hell!!!....It reflects badly on Indians and the CEO's and other corporate Honcho's in the U.S thereby have a good laugh @ Indians.
Infuriating!!!!
Sneha......who's doing CFA will agree with me on this one......and I hope so will everybody else.
