Minister who threw US giants Coca-Cola and IBM out of India
New Delhi: In 1977, he threw Coca-Cola out of India and two-and-a-half decades later, put spokes in the sale of India's second-biggest fuel retailer HPCL to the likes of Reliance Industries and Royal Dutch Shell. That was George Mathew Fernandes, former defence minister in the Vajpayee government who died Tuesday.
Fernandes was the industry minister in the post-Emergency Morarji Desai government in 1977 when he decided to throw Coke as well as IBM out of India over their refusal to follow the provision of what was then the Foreign Exchange Regulation Act (FERA). The provision stipulated that foreign companies should dilute their equity stake in their Indian associates to 60 per cent. Fernandes wanted Coca-Cola Company to not just transfer 60 per cent of the shares of its Indian firm but also the formula for its concentrate to Indian shareholders. The company said it was agreeable to transferring a majority of the shares but not the formula, which it contended was a trade secret.
The company exited the Indian market as the government denied a licence to import Coke concentrate. Fernandes then introduced a substitute indigenous drink called '77'. Coca-Cola, however, made a comeback in October 1993 post-liberalisation of the Indian market by the P V Narasimha Rao government and has maintained a strong presence ever since.
Two-and-a-half decades later in 2002, Fernandes was at the forefront of opposing privatisation of Hindustan Petroleum Corp Ltd (HPCL) and Bharat Petroleum Corp Ltd (BPCL). He was the defence minister under Prime Minister Atal Bihari Vajpayee but never shied away from speaking his mind about the disinvestment and even put it in writing that the sell-off policy was "making the rich richer and creating a private monopoly".
Fernandes, who was also the NDA convener, was often used by others in the ruling alliance to train guns on the then Disinvestment Minister Arun Shourie. After weeks of a political tug of war, Vajpayee reached a compromise that HPCL will be sold off while disinvestment of BPCL was put off to a later date. But Fernandes insisted that state-owned firms be allowed to bid alongside Shell, Saudi Aramco, Reliance, Petronas of Malaysia, Kuwait Petroleum and Essar Oil for HPCL.
Shourie was opposed to the idea of allowing firms like state-owned Oil and Natural Gas Corp (ONGC) to bid for government stake in HPCL, particularly after Indian Oil Corp (IOC) snapped fuel retailer IBP Co Ltd.
Those opposed to privatisation of HPCL and BPCL also took refuge under the Nationalisation Act saying the Parliament alone had the powers to privatise firms that were nationalised through a law passed by it. The Supreme Court on September 16, 2003 also ruled that the government should seek Parliament's approval before proceeding with the sale of HPCL and BPCL. With general elections only a few months away, the NDA did not risk going to the Parliament. It is another matter that the NDA in its second stint, last year, sold the government's entire 51.11 per cent stake in HPCL to ONGC for Rs 36,915 crore.
Former prime minister Manmohan Singh Tuesday expressed profound sorrow over the demise of George Fernandes and said the country has lost a versatile personality who excelled as a mass leader and gave importance to the downtrodden. In a letter to the leader's wife Leila Kabir Fernandes, Singh said he joins numerous admirers and well-wishers in mourning his death. "In his death our country has lost a versatile personality who with his unparalleled efficiency excelled as a mass leader and gave paramount importance to the well-being of the downtrodden people of our country," he said in his letter.
"I take this opportunity to convey to you and other members of your family my heartfelt condolences on this bereavement. We pray to the Almighty to give all of you the strength to bear this great loss with courage and fortitude," he also said.
Fernandes, who was railway minister in the V P Singh cabinet and defence minister in the Atal Bihari Vajpayee government, died here Tuesday at the age of 88. He was suffering from Alzheimer's disease, which had forced him out of the public eye for several years.
As defence minister, Fernandes once sent two senior bureaucrats of his ministry to Siachen glacier when he came to know that they had held back a file on purchase of snow bikes for soldiers deployed at the world's highest battle field. Known for quick decision-making and administrative acumen, his concern for the armed forces was all too evident.
He visited the Siachen glacier, where temperatures can dip to minus 50 degrees Celsius, nearly 30 times as he was very much concerned about living conditions of the soldiers deployed there, defence ministry officials said. Fernandes would never miss an opportunity to acknowledge the contribution and express gratitude to the soldiers, particularly those deployed in difficult areas along India's borders with Pakistan and China.
"Kaise hain aap log? Sab kuch theek hei na? Kab chhutti mein ja rahen hain? (How are you? Is everything fine? When are you going on leave?)" — this is how he would often converse with army men, according to a senior military official.
Fernandes became Defence Minister on March 19, 1998 in the Atal Bihari Vajpayee cabinet. In the early part of his tenure as defence minister, Fernandes was once "very livid" when he came to know that two bureaucrats in the ministry's finance department were sitting on a file for procurement of snow scooters for soldiers in Siachen.
Officials who worked with Fernandes said he immediately issued orders for sending the two officials to the Siachen glacier to have a firsthand experience of soldiers' life there.