Pay 2 Sell

Two of my students from Management college accosted me in the corridor of the college with a newspaper folded at a news of a joint venture gone sour. I smiled at the juvenile attempt to butter me up by showing they took to heart my advice to scan news for the subject of amalgamation, mergers and takeovers which was the subject handed to me as a visiting faculty. ‘Not just to impress you sir’ spoke Sunil, ‘But to appraise you what we stumbled onto’. Ushering them to an empty classroom, Sunil showed me extracts of the joint venture which had the standard clause of equal sharing of profits and losses. Then he calculated the shares owned by the outgoing co-venturer. The carried forward loss of the joint venture was so high that the capital was completely eroded. Then came the punch line ‘Sir, if the capital is negative, will the seller have to pay the receiver of the shares when he exits the company?’ I swear my arteries froze cold as I had no explanation for this unique situation where the seller will have to pay!

Bidding for time, I reached deep into my memory to search for parallel situations where the seller would have to pay instead of receiving money. There are such rare cases. I was shocked to realize that I had myself paid to sell – my old fiat car. It was in running condition but the new Korean-Japanese models flooded the market and no-one wanted to buy a second hand fiat which once was selling more than the showroom price. So I had to pay the scrap dealer to take the car away.

The Indian social custom/structure of wedding especially in the north is very similar. To make your daughter go to her in-laws place, you have to bribe the in-laws to take her away with dance and song. I believe it is called dowry. Though frown upon and declared illegal, the economics of the situation is perhaps stronger.

Then there was a situation where we paid indirectly to cart away unwanted from our office – our egomaniac boss. We hijacked his profile from the computer and spread it over HR firms and paid them to offer him a lucrative job. Only with his departure could we breathe and actually do something constructive instead of just feeding his ego.