Monday, October 05, 2009

Bharti/MTN transaction, and India's problem of capital controls

I have a piece in Financial Express today about the deeper linkages between the failed Bharti/MTN transaction and India's problem of capital controls.

The dual listing issue was, of course, not the only or even the main reason why the Bharti/MTN transaction failed. But it was an important impediment, and many interesting transaction structures could have been used if this constraint had been absent. And, the issues that I highlight in the article are applicable in a much broader range of situations. Unsigned reportage in Economic Times suggests that a few other people are also thinking similarly.

Also see reportage by Heather Timmons in the New York Times. Subhomoy Bhattacharjee in Financial Express has interesting views. Also see The legal aspects of dual listings, on the blog `Indian corporate law'.

For another story of Indian companies who are growing up, facing global competition, and hitting constraints of Indian public policy, see this story by Pallavi Aiyar about Jet Airways setting up their hub in Belgium.

3 comments:

  1. You have raised a very pertinent point regarding the way things are for smaller companies.Not only the financial services,small companies also have to bear the high cost of compliance with myriad regulations.
    At the same time,this is a niche market that can be served profitably.
    Cannot the small companies form a little boys club to push for their interests forcefully; preventing the likes of Bombay club from hogging all the mindspace of policymakers.

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  2. this is matter of concern that Indian policies is not as effective as they should be when we talk about outflow.

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  3. I think bharti and MTN face the problem settling there capital.

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