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Full transcript: Your Call with Naveen Jindal

Full transcript: Your Call with Naveen Jindal
NDTV: Good evening and welcome to Your Call. On the show tonight, businessman- politician Naveen Jindal. He's been in the eye of storm over Coal-gate, but here tonight to answer all questions. Naveen Jindal thanks for coming in. I introduced you as a businessman-politician, at least these two, businessman and politician, nowadays in India seem to be viewed with suspicion. Are you dismayed by that or you think there is a grain of truth in that?
 
Naveen Jindal:
People who do not understand this, they are the ones who talk like this, because our Parliament consists of people from all walks of life. You could be a farmer and be in Parliament, you could be a teacher and be in Parliament, you could be a lawyer and be in Parliament, you could be an industrialist and be in Parliament. So when people from all walks of life come to Parliament, to the greatest temple of our democracy, that's how it becomes richer, so the people from various walks of life can add to it from their experience. So I see it's a very good thing and my experience of business, of setting up industries, I think I have brought a lot to the table 
 
NDTV: The core of the issue however, especially in the recent controversy over Coal-gate, is about whether politicians influenced or furthered their own business interest in allocation of coal blocks, and that's what the Opposition has accused you of. Do you feel that the reason in essence is a conflict of interest because you are a Congress MP? Did the government favour you?
 
Naveen Jindal: Not at all, I don't think the government has favoured me at all, ever. All the coal blocks that we have been allocated have been purely on merit. I joined politics only in 2004, so before 2004 also our companies, our various companies, have been allocated coal blocks. 
 
NDTV: So your Father was in politics?
 
Naveen Jindal: Yes, my Father also came into politics much later, and then when he came into politics he was hardly doing any business, he was mostly involved in politics because he only joined politics when he was 61 years of age. So that time he was spending more and more time in politics. So whatever we have been allocated our industries are running for more than 4 decades now. We have an extremely good track record of setting up industries, of making successful projects, so whatever coal blocks have been given I think, if you see our track record of developing them, I think it would be better than anyone else in the country.
 
NDTV: Let me just go across to what actually started this controversy, because when the CAG report came out, though some of your blocks were named, you weren't the target; but the attacked was stepped up by Sushma Swaraj. Let's just hear what she said. It's interesting because Sushma Swaraj, this only came out a few weeks after the CAG report actually came out, and many said that the Jindal's have also benefited under the NDA government also, under the Chhattisgarh state government, which is run by the BJP, so why target you. But she has made the point that the Jindal's and your company had benefited, one third of the current coal blocks allocated are with you. No conflict of interest, nothing to do with you being a Congress MP?
 
Naveen Jindal:
Not at all. And I do not agree with this one third. If you see overall, coal blocks that have been given and the amount of coal that has been given, and it come to around 5%. So what she is saying one third, it would come to one eighteenth or something, okay, I think that's not important.

NDTV: Highest block reserved by a private operator?
 
Naveen Jindal: Yes, but that's not important. You should also see that correspondingly what is the investment that one has promised, what is the investment that one is supposed to make to get use out of those coal blocks. If we do not set up, these coal blocks have not been given to just sell coal. Right. For every coal block, if it's a large coal block, say there is a largest coal block is of 1500 million tonnes, 1.5 million tonnes for converting coal to petrol. So to make that happen one has to invest 60,000 crores. So if we do not invest 60,000 crores we cannot do anything with that project. So people forget that the more coal blocks you have taken is also of much more of a responsibility to make them happen. 
 
NDTV: But the big questions on the coal blocks that you got, let's for instance take the Jeetpur coal block mentioned in the CAG report, and in fact first recommended by the IMG to actually de-allocate it from you, and then it came to deducting a bank guarantee. So in that sense there clearly was something, which didn't work out there?
 
Naveen Jindal:
Okay, Jeetpur. I have been there a couple of times. This is in Jharkhand. There is a special Act over there, it's called Santhal Pragna Tenancy Act, over there you cannot buy any land from the people directly because most of the land is Aadivasi land. You have to go through the government and this is the first case probably in the country where 100% of the people have given consent that they want, they are happy to sell their land, so to get all these consents, to get all the people on board it's not easy. You know it is extremely challenging to make any of these projects happen, and why IMG? I would presume that before they have recommended cancellation because they had information which was one year old, so it is their own coal controller who went there, who saw and when they saw what all has happened in that one year, because they were referring to one year old reports, they realised that this company has done more work than anyone else in this region. So that is why and I feel even the bank guarantees that they have, because we do not have any clear cut communication from them, but from the press reports, I think even that's very unfair, because if they prove that our company has delayed the project by even 1 day I would say deduct all the bank guarantees. But if it's not our fault if the fault lies with all the different permissions. It takes so much time to get different permissions from the government, from the State government, from the Central government, it's not our fault. It's extremely challenging and in fact people, not only our company, whichever companies are working in these areas and have done good work they have to be rewarded. These are the companies, which are creating wealth for the country and when a senior leader like Shrimati Swaraj says Naveen Jindal, it is not Naveen Jindal, Naveen Jindal is not the same as Jindal's Steel and Power Llimited or Jindal Power Limited. These companies are institutions, where thousands of people are working. It is all team efforts. I think it is insulting those thousands of people engaged in their hard work and creating wealth for the country when they just blame it on individual.
 
NDTV: No but Mr Jindal, the argument would be that the rules may not have been there, that is the argument, that government's rules let some companies, let private companies benefit. The Supreme Court judgement also made the point that you can't have one set of people benefiting at the cost of others. One argument would be about your plant in Chhattisgarh, where they say you have got cheap coal or you have got a captive block and you then sold power at market rates, so that undercuts the entire UPA government's defence that this was done to provide cheap power. How does it provide cheap power?
 
Naveen Jindal: Okay, let me clarify this to you Sonia. Firstly, we did not get any cheap coal. Okay.

NDTV: Free coal?
 
Naveen Jindal:
No, no nothing is free. There is nothing free in this life, okay. We got a coal block, extremely difficult coal block. You could not even get there. There was no road even to get there. It was not even sub blocked. We took the risk to go there to develop that coal block. It took almost a decade to develop the first coal block.
 
NDTV: But Mr Jindal, you did this with profit. You are a businessman so obviously you presumed there would be a profit.

Naveen Jindal: Obviously, every company, every shop, every person, even when they are doing agriculture they do it for profit. Profit is not a bad thing if it is done well, if it is done in a legal way and whatever profit one makes one pays taxes on it. Also nobody has made a charge that we have paid less taxes. So we have developed the coal block, which nobody had any plans to develop, and based on that coal block, if we spend 5,000 crore to set up a thousand megawatt power project. Okay. And where thousands of people are working, a thousand megawatt is coming into the country, so it is something, which has to be appreciated. And now the coal cost, you said cheap coal, a lot of people say we have got cheap coal. No, our coal cost is very similar to the cost of coal from Coal India. If we had brought the coal from coal India I would cost say Rs 700, our coal also costs 700 rupees, so where is it cheap? Now why the company makes money? It is because we did not set up the project 1500km away, we set it up next to the mines so that we could transport the coal from our conveyer belt and save on the transportation cost. We set up the project with lowest capital cost, okay. We are running the plant with 97% plant load factor that leads to the efficiency. And at the time we wanted to sign long term PPS, nobody was coming forward to sign PPS so we took the risk and set up the project, spending 5,000 crores. And when we came into generation, at that time government had a policy, 2003 Electricity Act was passed. 2005 Power Policy had come out which said that 15% of the power should be merchant power, okay. Merchant power to deepen, strengthen the power markets. So now at that time the power was selling at Rs 5 when we came into the market. If the market price is Rs 5, I can't say sell it for Rs 4 and then over the years from Rs 5 it has come to now level of Rs 3. So many times we have to keep the plant closed. Also so nobody sheds a tear when your plant is closed or when we don't have coal, when we have a problem, so whatever we have done we have in these 5-6 years. Paid almost 2500 crores in terms of royalties, taxes to the state government, central government, so it is a successful case, which has inspired hundreds of people to set up power projects.
 
NDTV: Let me get in Mohammed Salim of the CPI(M) who's on the phone line. Mohammed Salim, Naveen Jindal is making a strong defence of the government's coal policy and why his company got allocations. Go ahead with your questions to him Sir.
 
Mohammed Salim:
I have no dispute personally with Mr Naveen Jindal, but the question is from which angle he was looking into the issue now? As an entrepreneur or as an industrialist he is seeing from one angle and obviously his motto is how to make profit. There's not question at all, but as people of Chhattisgarh and as one, after the Coal Nationalisation, the Act is still there, the Act of Parliament, so these natural resources are of the nation. So when the government decides to hand it over to the private companies, these scarce natural resources, which are limited. Also so why, without changing this Act, this has been done behind the back. Secondly, you said auction is not the only way of course, it is a good way, then you decided on the price, saying that if you give this cheaper than if you pass on to the consumer ultimately. But now you are saying it will benefit the company, but not the people. So whole philosophy of this trickle down effect, that GDP will grow, production will grow, company will be beneficiary, and then poor people, who are waiting down the line they will get. And also after a decade also they have not got it. So the whole philosophy is wrong, in that case some people have benefited out of the natural resources and most of the people are suffering.

NDTV:
Mr Salim thanks for that. I'm going to get Naveen to respond to that, but also Mr Jindal, questions sent in by our viewers. They are making the point that you talked about the profit and the risk that you also invested in a sense going here. But what about issues like whether the sale of power at merchant rates contributed to the JSPL stock price going up from 30 in 2005 to 720 in 2011? Subbash Iyer has written in and asking that obviously this was because of the coal block allocations record. This was seen as a windfall, seen as a profitable venture not entirely so risk based as you are pointing out, but obviously the market and your market cap shows that this was seen as a win-win for Jindals, not for the people, as Mr Mohammed Salim points out.

Naveen Jindal: Okay, we do not make only power, we make steel. So now Mr Iyer or somebody else can also blame that now you are making steel also efficiently. Why are you using this process, why are you using this technology? So I do not want to get into these kinds of arguments. What we have done we have done extremely efficiently, properly, following all the rules of the land and made a successful case. And I have explained to you that power prices, when we came into generation in 2007-08, they were at a level of 5 rupees in the merchant market. Now the same prices have come from Rs 5 to Rs 3 level. And if more projects come up, we all know that there are hundreds of power projects in the country which are languishing, which are getting delayed, which do not have coal. So if their problems are solved, if supply side constraints are removed and the generation increases, automatically power prices would further go down. And I must add in all this we are also giving power to Chhattisgarh Electricity Board, even at time that was given around a level of Rs 3. We also set up an industrialist estate in Chhattisgarh where we are supplying power at Rs 2, we were supplying at Rs 2:50p at that time. So nobody sees the thing in totality. So people just like to find fault at you and just try to harp on that, so I say let us have a positive outlook towards these things and we should see things in totality. Overall if you will see, you will realise all these projects, which have all these coal blocks, have been allocated to different companies. It has definitely added to our GDP, definitely added to our prosperity and definitely added to the development. If you actually go and see where these coal blocks have been developed, how the roads have come up, how the towns have come up, how the schools have come up, how those villages around those mines have developed and benefited from this, I'm sure all this criticism you will not have.
 
NDTV: Naveen Jindal, how can you say that when the facts are, so many, in fact 98% of the coal blocks allocated to the private sector haven't begun? Where is the UPA argument of, I think it was 2020 or think 2012, cheap power for all? Where has that happened?

Naveen Jindal: Sonia let me tell you this has been going on since 1993. I believe since 1993 around 20% of them, out of 200 coal blocks that have been allocated, around 40 of them have started and many of them are nearing production. They are going to start very soon, it takes a very long time; it's a very difficult process. That's why I said companies who are engaged in developing these coal blocks they are doing a very good job, they are doing a great service to the country, so they need encouragement, they need support because it is extremely difficult to develop these blocks. Only if we develop these blocks and do something with them will we be creating wealth for the nation, so these companies need support and encouragement nor criticism.
 
NDTV:
Shaina NC joins us now from the BJP. Shaina NC you have heard Mr Naveen Jindal making the point we need support not criticism and one interesting aspect of course is that now the CBI will also be looking at the allocations from the NDA government's time onwards, and in a sense Jindal Company also got allocations under the NDA government. So why was it that he was all right then and suddenly politically volatile because he's in the Congress now? Go ahead Shaina.

Shaina NC: Sonia, I think the two crucial questions here is no denying that development is a must and it generates livelihood, jobs etc. great. But as Mr Jindal said that profit is not a bad word; well let me say that is the loss for the nation, correct. In his opinion random allocations that have been given to random people when there was an option to having a tender process or an auction process. Do you think this is bad policy of the government and second I want to ask, as a youth leader, is it actually profitable for him to be a politician or is it profitable to the country? Which is his priority?
 
Naveen Jindal: Hi Shaina, good to hear from you. Okay, firstly, the last question first, is it profitable for me to be in politics? No I don't think so, I don't think it is profitable for me to be in politics. I'm in politics at the cost of business and I do this because ...
 
NDTV:
Your balance sheet doesn't show that.
 
Naveen Jindal: Okay, well I'm sure if I was not doing this maybe I would be doing even better, because I would be giving lot more attention to my work. But I want to give the best years of my life in serving the country and I feel that I can do a lot through being in politics, b   eing in Parliament. Now second question that she asked was regarding the nation, it is no loss to the nation if we, over the last five years like I have said since the coal block has started, if we contributed 2500 crore rupees in form of various taxes. How is it loss to the nation? If thousands of people are working in the company and if 1000 megawatt has been going into the country, I mean we take pride in lighting up the nation, how is it loss to the country? If that coal remained underground that would have been loss to the country.
 
Shaina NC: Well clearly the beneficiary here seems to be Naveen Jindal and his group and having said that I don't want to turbulise this debate. I have only posed this question, which is that is this a notional loss for the country or is this a genuine loss for the nation? And the other being that when you are in the public life politics is this sometime an opportunity that you may have wanted to take, but you need to restrain if you are in a position of power. So in that light I ask the question whether it's profitable to be a politician today?
 
Naveen Jindal:
Okay. Firstly, I would like to answer to Shaina that it is not a notional loss to the country. It has been a genuine gain to the country for setting up all these projects and for making investments.
 
NDTV:
So our Constitutional auditor has got it all wrong? 
 
Naveen Jindal:
He has got it completely wrong. I can explain it to you if you give me time, I can explain he has got it completely wrong. Secondly, what is said about the Chief Minister writing letter to the government, you know so much is said about this, that Orissa Chief Minister is writing a letter, so if we were going to invest 50,000 crores in the state of Orissa, where more than 20,000 people are going to get employment, we can't expect Chief Minister to write a letter to the government, so what is the big deal. Every Chief Minister writes letters to the government in the interest of their development of the states, so what's wrong with that and we are writing so much about it 
 
NDTV: You wrote to the Prime Minister as well for the coal block allocation. Isn't that the conflict of interest that Shaina NC is talking about?
 
Naveen Jindal: No I wrote as Managing Director, as Chairman of company to the Prime Minister. So what's wrong with that? 
 
NDTV: But you are also MP under him.
 
Naveen Jindal:
Doesn't matter and whatever I have written he has not done anything about it. Did that change any decision? I can ask, if I had not written to him, if I had just spoken to him, that would be okay, because I quoted in writing giving the facts. What has he said? For necessary action, what was the action? They did not think it was okay they didn't do it. All right. So why should I not be able to say, I should be able to say what I want to say to you or to the Prime Minister of the country, and then you, in your judgement, if you feel that it deserves merit you do it. If you don't want to do it you don't do it so why this? 
 
NDTV: We have seen the records of the private sector development for reasons, which you have pointed out, but others dispute that has been actual. I mean in that sense Coal India still provides over 90% of the coal production and the argument that why Coal India had to go to Mozambique for blocks when companies like yours have got blocks right here?
 
Naveen Jindal: Coal India has gone to Mozambique and they have got very large blocks with billions of tons of coal in them. Did they have to go through any auction? Our company also has got very large coal block in Mozambique, the government is very keen that please come and invest in our state and when you go to those countries they welcome you. They thank you for making the investment. Does anybody welcome you in India? Does anybody thank you for investments in India? 
 
NDTV:
Is it opposite?
 
Naveen Jindal:
Of course it is like that all the time. Nobody says oh wow Naveen you did a great job, you developed something and see I'm nobody it's all teamwork at our company, with thousands of people who have worked hard. You know you have to go and see how hard they have worked to make these things a reality. Now one should really appreciate that effort, that this has come to a reality you know, the coal block is working, we are taking out coal, we are paying royalties, we are generating power, we have spent thousands of crores. 
 
NDTV: But not cheap power. 
 
Naveen Jindal: It is cheap power, Rs 3. You are not getting power at Rs 3 in your house.
 
NDTV:
You are giving it at market rate and that is an issue, which you will be dogged by your critical opponents. But let's go across to some young people from Bangalore who have some questions to ask you. Go ahead. 
 
Student:
Actually the thing that you said about studies are pretty good, but in studies we have, studies one fundamental fact in business management. Suppose if I'm a buyer of certain commodity, in this case I would like to take power, if I'm a buyer of power I will be looking for the seller who are going to sell me power at the lowest possible price. But Jindal Power Limited had differed all these theories because you have quoted power at the highest price and you have gained highest profit in the market. So can you tell me how JPL has managed to pull it off in such competitive world?
 
Naveen Jindal:
Sure Shitij, I will be able to tell you very happily. Every time, firstly, you have got it all wrong, every time we have sold power, our customers have brought from us because at that point we are the cheapest, only then do they buy power from us. And secondly as far as a company making profit it's like saying if you start blaming Warren Buffett, oh he bought cheap shares and sold them expensive that's why he made money, so you don't hold that against him. Similarly, we, through our efficient operation, we don't waste any resources. We are very efficient player. We produce power like I said and there are various reasons why the company is making profits. Today there are many projects where the cost of generation is high but we, because of our efficiency which I explained earlier, because of lower transportation cost, high plant load factor, lower capital cost of the project, we are doing this and when we are selling in the power exchange or even when we are selling to state governments on short term or medium term basis, we are able to sell only when we are the lowest. so you are charged that we are selling expensive power is completely wrong. All are customers they are buying because we are the cheapest supplier to them. 
 
Student: One more thing that Lanco and NTPC they were supplying power even at the lower price than Jindal Power Limited, then how come they are eating flies and you are enjoying the hugest profit in this industry.
 
 Naveen Jindal: Why don't you ask then that why are they eating flies? I cannot speak for them. I have explained! So would you much rather be Jindal Power or you much rather be those companies which you named? If you were running it what would you like to be?
 
Student: Sir, as being a management student we have been listening from our faculty and also listening from our media that you are the highest paid CEO, for two successive years, Sir so it's pretty amazing and you are doing really good in it. So we just management students want to know of some suggestions from your side, like what we can do the basic principles or the key roles we should follow to reach your height? 
 
Naveen Jindal: Well I think you should do, first of all when you are studying you should study from the point of view of learning, not just from the view of passing your exams. You should work hard try to actually gain knowledge while you are studying and then wherever, whatever job you do, you should give your best efforts. All we can do is put in our best efforts and leave the result to the God and hopefully you will do even better than me. 

NDTV: An interesting aspect he talked about your pay package, 73 crores, highest paid CEO in the country. Why is it interesting? Because your Prime Minister Manmohan Singh just a year or two ago said that CEOs must be careful of the sizes of their pay packages. You don't see a conflict there?
 
Naveen Jindal: My pay package is decided by the Board of Directors. My pay package is approved, mine and every other Directors' pay package is approved by our shareholders in the annual general meeting. So if my shareholders and my Board give me some certain commission and something and the profit of that company is high and then if you see, I'm sorry to beat my own drum, but a few months back a report had come in business today, Harvard Business Review surveyed a period of 15 years, from 1995-2011, so they rated me as the best CEO of the country for a 15 year period and there are many such reports.
 
NDTV: But the Prime Minister talked of setting an example.
 
Naveen Jindal: One second Sonia, I also want to tell you, if you see and compare, I'm getting 2% of the profits as commission, as my remuneration package, so you are allowed up to 5%. So I'm not getting even half of what is allowed by the Company Law Board and there are many people who are getting 5% and there are many people who are getting 10%, 11% of the net profits. So nobody goes deep into the comparison, they just find figures and just pounce on that, so everything is relative. You have to see what percentage I'm getting of my profits, what is somebody else getting of their profits, you will find mine is among the lowest. 
 
NDTV: Let's just go across Chandigarh, the capital of Haryana, also of course where you are a politician from. Let's go across Chandigarh and hear questions from them.

Question 1: I want to ask that we are in a country we boast about our progress in IT sector. Mujhe yeh poochna hai ki jis countrymein hum IT ki progress ho rahi hai vahan women ko hum buri tarah treat kar rahe hai. I want to ask you that if your daughter wears skirts, jeans or western clothes, any of the western clothes so will you object, since you are in the support of khap panchayat? So this is my question to you. 
 
NDTV:
Naveen Jindal that was a big controversy when you supported khap panchayat. You wrote that letter for supporting Hindu traditions. Then you see khaps who say don't wear jeans to young girls. Go ahead what would you tell Ritika?
 
Naveen Jindal: I would tell Ritika that I have a 14 year old daughter who wears skirts, who wears shorts and looks very pretty wearing all those. I'm a very proud father and so does my wife wear, my wife also wears skirts, shorts and you know whatever, so she also looks very pretty and I'm very proud of that and no organisation does everything bad or good.  I supported the only good deeds done by khap panchatyats. In the past I have never supported any of the wrong doings of any of the khap panchayat. Khap panchayat has no business to tell anybody as to what they should wear and to what they should do. I have never supported that, but it's unfortunate that media, I must blame you Sonia, not you but media in general for sensationalising something, and not putting the fact in the right perspective. So let me clarify that I do not support any wrong doings of any khap panchayat             
 
NDTV:
Naveen Jindal thank you so much for coming in, taking all the questions and ending with a smile on your face. Thanks so much for joining, thank you.  
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