India's predatory strategy for acquiring free companies, banks and factories

 When a deal is too good to be true, believe it, that it is not going to be true. This truism is like Murphy's Law, and will always work like clock work. India will lure foreign investors to pump money into India to build factories, set up companies, banks, manufacturing plants etc etc with attractive offers. Once the money is in, best money sunk into in buying land, machinery and buildings, the scheming will start to work in India's favour.

The Indian predatory formula is simply to acquire foreign investments and assets in India for free or at a huge discount. Chinese companies had been duped over and over again with attractive terms only to see the terms being changed forcefully to take over the company. The main goal is for India to own these companies or factories, banks, legally at a big discount, or de facto owning the company, like having the companies employing Indians for all the jobs. It would would start with a demand for 51% of the employees to be Indians, followed by employing Indians for all management positions. When the latter materialised, the Indian management would go about employing new Indian hires to fill up all positions. The end result, the company would be de facto an Indian company without India paying a cent for it, when all employees are Indians. In such cases, the real owner would lose all control of the company.

The second strategy is to fabricate all kinds of charges like tax evasion, money laundering, accounts problems or violation of Indian laws. Then huge fines would be imposed on the companies, wiping out all the profits over several years. Instead of making profits, the companies would end up in big losses, but unable to pull out of India unless it is prepared to suffer even bigger losses. Foxconn was decisive enough to cut losses in the millions to flee India before incurring more losses. Some investors would not want to cut loss and instead, dumped in more good money, hoping and praying that in the long run things would be better. Far hope to these losers.

The glowing and rosy pictures of an Indian market as big as China, a big pool of cheap labour and top talents, are the carrot or mirage dangling to attract unthinking and foolish investors to rush in.  And once in, it is very difficult to get out without being robbed of everything. And staying is as good as letting the Indians own the company, managing all the investments by the Indians as if they belong to the Indians, and the investors have only a superficial claim to the entities, legally, on paper. In reality, everything belongs to the Indians.

Is this predatory strategy difficult to understand? After understanding the objectives of the Indians and their well known formula in practice, would any foreign investors still thing India is an attractive and great opportunity to invest in?

PS. India dangled a big carrot of wanting to buy 1,000 buses from BYD with the condition that BYD set up factories in India. This time BYD was smart to decline the offer or they will end up building a factory for India with all the equipment to build electric buses, and India getting the buses for virtually free.