Corporate Raiders: Who is their next victim?

New Delhi, Delhi, India

The Recession has come to hit us hard and has reawakened the animal instinct of those who can be aptly referred to as Terminator Corporations. These times of economic downturn are best times for large shark like corporations to prey on smaller albeit valuable companies(David v/s Goliath situation) that suit their ambitious plans/allow them to foray into a new/high growth sector. A glimpse into the past will reveal that most of these covert operations follow a typical pattern involving precise steps that make these corporate raids akin to surgeries conducted with clinical precision. Indian Corporate history is fully of examples wherein corporate raiders have bared their fangs in an attempt to take down rival corporations and their reputation. Among easy targets are first generation companies with a successful track record, innovative business model and bright growth prospects. Typically these new age companies are politically naive and have risen on pure merit.

"In the recent times we have witnessed increased enquiries by companies regarding information security as well as seeking services for safeguarding their corporate reputation as they believe that they are being made targets of a malicious campaign by vested interests" said Mr. Ajay Trehan, CEO Authbridge Research Services, an Investigative agency.

In recent times the example of Educomp comes to mind: A successful and unique business model in the booming education sector, it was started by a first generation entrepreneur. The company recently came under attack. Series of 18 damaging articles on the company have appeared in the last 3 weeks in an English newspaper, albeit with no business focus, which created a flutter in post Satyam jittery market. Reacting to this unfounded media reportage a probe was ordered by the Ministry of Corporate Affairs which was then followed by a question being raised on the company in the Parliament by an MP from South India with no track record in education. This is reminiscent of some earlier corporate attacks like the one on Reliance Telecom IPO, ICICI Bank etc. Seeing the definitive pattern the question is- are we staring in the face of another victimization story?

theinformedinvestor@gmail.com

Source: The Informed Investor (Business Wire India)

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