When Corporate India thinks about mergers, acquisitions and share issues, or even wants to settle family disputes, there is one person it usually goes to: Nimesh Kampani.
In 2005, when Kokilaben, the Ambani family matriarch, wanted to put an end to the acrimony between her two sons and help them come to a settlement, she turned to Kampani. The Tatas haven’t really done any major deal without consulting Kampani, 61. His list of clients is a who’s who of India Inc.
Yet, the man who heads India’s best known investment bank, JM Financial, and who was ranked last year by Forbes as the 42nd richest man in India with a net worth of $1.3 billion (Rs 6,500 crore ), has been in hiding in Dubai, evading arrest in India where there is a ‘red alert’ for him at all major airports.
It’s a case that pulls in the best of corporate bad practices and political skullduggery. Kampani has been implicated in a case of payment default by a Hyderabad company, Nagar-juna Finance, to investors running into Rs 100 crore.
Kampani was an independent director on the board of Nagarjuna Finance. His son, Vishal Kampani, said, “He resigned in early 1999 and it is an accepted position that the company started defaulting after he resigned.”
The Andhra Pradesh High Court rejected his plea for anticipatory bail recently. “We will move the Supreme Court very soon. It may be as early as this week,” Vishal told HT.
The Andhra Pradesh government said it would oppose the bail application when it comes up in the apex court. “The state government will oppose it. It is the state’s responsibility to oppose it,” advocate-general C.V. Mohan Reddy told HT.
“If independent directors are targeted in this manner, the country will witness a shortage of such directors,” said Hemendra Kothari, chairman of DSP Merrill Lynch, who has known Kampani for four decades. So why is Kampani in trouble? “There is a perception that Kampani is being targeted for bailing out Ushodaya Enterprises,” a top financial analyst in Mumbai said requesting anonymity.
Ushodaya Enterprises, controlled by Andhra Pradesh’s media baron Ramoji Rao, runs the widely popular Andhra daily Eenadu. In 2008 Kampani had invested (reportedly through Equator Trading Enterprises Pvt Ltd, a special purpose vehicle privately owned by him) Rs 1,200 crore that helped the company stay afloat. And that, it’s said, brought him trouble.
Eenadu’s rival for the Andhra newspaper market ostensibly didn’t like it and used political connections to book Kampani under a state law — the Andhra Pradesh Depositors Act.
Ramoji Rao was considered very close to the Telugu Desam Party founder, late N.T. Rama Rao, and is widely perceived to be the brain behind the formation of this regional party, which is now in opposition.
The present Congress government has ordered a probe into alleged financial irregularities in Rao-owned Margadari Chit Funds, which faced complaints of collecting Rs 2,600 crore from investors but not paying back.