Billionaires become poorer

The global financial crisis has wiped out the net worth of several billionaires in India who held on to enormous wealth only a few months ago. Though the loss is only notional, in terms of figures, they are quite mind-boggling. The list of the losers includes. Mukesh Ambani, Anil Ambani, Azim Premji and K P Singh have lost billions in their share values.

Now the second generation would-be billionaires have also lost enormous value of their wealth. Pia Singh is the biggest loser at Rs 3300 crore. She is the daughter of realty king of Delhi, DLF's, K J Singh. Sanjay Chandra of Unitech Builders has lost Rs 2930 crore, Rajiv Singh of DLF Rs 1588 crore. New generation Ambanis, Isha and Akash, too have cumulatively lost Rs 675 crore. And all this might affect their future investment plans.

What happens to the dream home of Mukesh Ambani being handled by Religare? I resume it goes unaffected by the financial storm.

AIG might be a loser but Tata is sitting pretty

The world's biggest insurer, AIG, might have been hit badly by the U.S financial crisis triggered by the sub prime mortgage crisis. But its partner in India Tata AIG, is sitting pretty on the whole life and other insurance businesses. The Tatas are well capitalised and might, under the insurance laws, can even buyout AIG's stake in the first right of refusal principle.

With the U.S. government buying into the ownership of AIG to rescue the firm, there have been fears that the new ownership might affect Tatas' expansion plans. But there is word from the US government that the change in partnership will not affect the Tatas because it is only temporary in nature.

Tatas may not only take over AIG's India stake but also are eyeing a 49 per cent stake in AIG's Asia operations. The unit in question is American International Assurance Company. AIG's Asian operations, based out of Singapore is estimated at $20 billion to $25 billion. AIG is now keen to dispose of its assets as much as possible because of the $85 billion bailout of the U.S government.

After all, it's a free market economy and the U.S. government will exit the venture once the situation normalises and AIG pay back.

Jet - Kingfisher alliance repercussions

The Indian aviation sector is up for a and shake-out. The unprecedented rise in crude oil prices pushed up aviation turbine fuel (ATF) prices, which made many an airline fight for survival, especially in the context of the global financial crisis.

The new blow has come from the financial crisis, which has reduced flow of business travellers to emerging markets such as India. Most of these travelers came from the US. With the collapse of so many leading banks in the US there is a tight credit squeeze and funds have dried up for expanding businesses and so much less travel. The budget airlines too have added to the confusion in their anxiety to survive. First, Jet swallowed Sahara Airlines to fight the low cost airline fares battle, and then Kingfisher got the mother of low cost carriers, Air Deccan, to merge with it sothat it could beat the condition of minimum three years of service to go international.

And now comes the mega alliance between Jet and Kingfisher. The idea is to share services and other facilities to bring costs down. But the mega alliance has given rise to the suspicion that it could be the beginning of cartel practices in Indian aviation. Rightly the MRTPC has called upon both the airlines to prove they are not forming a monopoly.

But the matter doesn't end there. Deccan owner Capt.Gopintath is upset with the alliance because first, his merger with Kingfisher made him lose his identity and now the new alliance could wipe him out. So he has reacted by offering to buy Mallya's stake in Kingfisher Deccan and run Deccan once again as an independent airline.

With entry of foreign airlines into the aviation industry just a few air miles away, as India will open up its skies further, Gopinath hopes to muster enough investors to buyout Kingfisher Deccan. But Kingfisher is a passion for Mallya and he may not allow that. So would there be surrogate ownership of airlines before foreign participation becomes official?

Already there is a lot of suspicion that Jet gets secret foreign funding (apocryphal stories link it to a man in Dubai). Tatas are allegedly behind Agarwal’s Indigo. Does the name sound similar to the car? Is Singapore airlines behind Tatas for acquiring Indigo? There are wheels within wheels in India's aviation story.

A ‘miscommunication?’
On the eve of Deepavali sacking close to 2000 employees of Jet Airlines following its alliance with Kingfisher, seems mired in mystery. Within 24 hours of their sacking, they were all taken back by a seemingly emotional Naresh Goyal who said most airlines staff, particularly in flight crew, were all twenty somethings, the same age as his daughter.

So was the decision to sack the employees taken without his knowledge, the owner of the airline? It must be remembered that the chief executive of the airline is a foreigner and not an Indian. For foreigners there are no emotions;they are hardcore businessmen. For them sentiments and business don't mix. So are the new generation Indian entrepreneurs.