Businesses and risk go together
and hence the charm of the Capital Market.
Business failures could be
categorized in three boxes.
- 1. Those that fail owing to the business environment
- 2. Those that fail due to inadequate management inputs
- 3. Those that fail due to blatant fraud ( The Kingfishers of the world)
India till recently did not have a proper
regulatory environment to handle cases falling in the first two categories.
With the introduction of the Insolvency and Bankruptcy Code (IBC), a clear road
map is now in place to handle insolvency.
Mr. Siddhartha built a brand, of global
dimensions and a case study for any aspiring Indian entrepreneur. To take the
extreme step for a business environment issue and probably management lapses
leading to a temporary insolvent situation is tragic. Perhaps some of the
investment decisions have gone wrong and the returns are not forthcoming. That
is precisely the risk in business that lenders are supposed to take in their
normal course of business. There could other issues that Mr. Siddhartha faced
which we are not aware of. None of the working capital accounts had turned non-
performing, a reflection of his concern for the reputation of the brand and for
the welfare of the thousands of stakeholders cross the country.
The next time we visit a CCD for
a business or leisure meeting, let us spare a thought for this gentle, quiet,
successful businessman. RIP
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