Gospels from the 'Holy Trinity'

One of the first pieces of advice the editor of an Indian business magazine offers new recruits is to keep aside bestsellers and curl up with what he called the "Holy Trinity" "" Fortune, Businessweek and The Economist "" which besides providing valuable insights into the world of business, offered great reading pleasure as well.

When some reporters complained about senior editors exercising their first right of readership over the lone latest copy of these magazines, he personally ensured the librarian made adequate photocopies of the all the major features that appeared in them for fair and equitable distribution.

His simple directive to reporters was: just copy the foreign magazines. Easier said than done, of course. But most reporters who followed the practice laid down by the editor, agreed that their stories, and indeed the way they approached them, improved considerably after a prolonged brush with the Holy Trinity.

Therefore, when I came across a copy of The Best Business Stories of Year "" 2004 Edition, I felt the kind of excitement that schoolboys do when they're given a new non-course book on their favourite subject.

The 35 stories featured in the edition are by and large excellent. If you follow business, you will certainly love the book. Even those who purely have a zoological interest in bulls and bears will find it interesting because most stories are written in a racy, whodunit style.

The most complicated issues of capital market regulations and accounting malpractices are dealt in such a lay-reader friendly manner that could give the authors of the PC For Dummies series, a run for their money.

John Cassidy's 40-page thriller on New York State Attorney General Eliot Spitzer's controversial crusade to save the small investors and the Wall Street from corrupt stock analysts, would be among the best.

Cassidy's story written for The New Yorker has all the ingredients: billion-dollar swindles, greed, corporate rivalry, smart investigators, upper crust New York society, and even some sex.

He carefully chronicles the irrational exuberance of research analysts at high profile investment banks like Merrill Lynch and the Citigroup-controlled Salomon Smith Barney who maintained a buy rating on Internet and technology stocks despite being aware of their shaky business models.

Jack Grubman, a celebrated telecom analyst with Salomon Smith Barney, who's annual earnings topped $20 million, upgraded AT&T from a "neutral" rating to a "buy" because the telecom giant was preparing to spin-off its cellular division through a stock offering, and Grubman's company stood to earn tens of millions of dollars if it could lead manage the issue.

Apart from the fat bonus he received for doing the dirty job, Sanford Weill, Citigroup's then chaiman, personally ensured the admission of Grubman's daughter into an exclusivist Jewish, Park Avenue kindergarten.

If you missed out the biggest accounting and corporate scandals that rocked US Inc between 2000 and 2003, this book offers an in-depth, ringside view of all the major events. Almost a third of the stories in the collection are about what went wrong at Enron, Arthur Andersen, WorldCom and Tyco.

The outcome of these scandals and the huge financial settlement made by many of the tainted companies show the power and importance of the small investors in the US.

Another must-read piece in the book, is James Stewart's profile of Tyco's disgraced CEO Denis Kozlowski. He transformed the sleepy Tyco into a $35-billion science and technology giant in less than a decade, and was on his way to the CEO hall of fame, to take what he thought was his rightful place, alongside Jack Welch.

Suddenly in 2002, the skeletons came tumbling out of Kozlowski's cupboard and it was discovered that he had cheated the company of nearly $600 million. Overnight from posterboy he became the symbol of CEO extravagance.

Steward writes engagingly about Kozlowski's infamous shopping list which would make Imelda Marcos look like a schoolgirl. Impressionist paintings, personal jets, a fleet of yatchs, carpets, fancy home-decor and yes, the poodle-shaped umbrella stand for $15,000, which seemed to anger Tyco's investors more than anything else.

The other standout feature of all the stories is that they rest on a foundation of rigorous research. And in many cases, journalists were denied access to the protagonists of the story. The sheer number of sources the writers have spoken to is mind boggling.

Fortune contributing editor, Andy Serwer's story "Where the Money's Really Made," is one such. It is about the small, secretive and closely knit community of hedge fund managers who rake in hundreds of millions of dollars every year, and are much feared operators in Wall Street.

So reclusive are the managers that nobody agreed to an on-record interview, forget posing for a photograph. When Serwer discovered the only photographer with stock shots of Ken Griffin who runs the $8-billion Citadel Investments Group, Griffin quickly struck a deal with the lensman to buy out the film.

Commonly known as "funds of funds", hedge funds in the last few years have given their high net worth investors double digit returns when the rest of the market was southward bound.

However, there's one little problem with such best-of-the-year books. In an effort to have stories on a diverse range of issues, the editors choose to have a fair sprinkling of almost everything, sometimes irrespective of its merit.

Every edition of the book has to have a few bleeding-heart stories; a couple of mandatory Joseph Stiglitz-esque commentaries on how IMF and World Bank are hurting third world economies; and one on a megacorp abusing labour laws.

So don't be surprised if next year there's a sepia-tinted account of how Bangalore snatched away the jobs of hapless Bostonians. But then, that's just a minor irritant for faithful followers of the "Holy Trinity".

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BEST BUSINESS STORIES OF THE YEAR 2004

Edited by Andrew Leckey and John C Bogle
Vintage Books
Price: $15/Pages: 471