What's in a name?

WHAT’S IN A NAME?

A lot, Mr. Shakespeare. Especially if your company is named Taylor & Sons Ltd.

Taylor & Son Ltd. was a company in Cardiff. Did readers get that right? Did they notice the difference? Therein lies the rub.

How often do we mistake Phillip for Phillips? The latter is on our tongue. A Bombay lady advocate, a Mrs. Phillip, gets the raw end of the deal ever so often. She continues to be Mrs. Phillips to the world.

To those who have had to deal with Registrar of Companies (ROC) and trust matters, the process of having a name accepted can be tortuous. It is done with good reason. Mohammed Ali and Ali Mohammed. Ram Laxman and Laxmanram. Whitefield and Whitfield. All so similar that mistakes are inevitable. Even pronunciations can play havoc. Glaxo is often called Glasgow!

So it is the duty of the Registrar of Companies to ensure that similar names are weeded out. If one were to try for Tata Steels Ltd., he would be asked to think again. Something original. More different!

The purpose is simple. The public should not be misguided. Surely, Tata Steels Ltd. would be able to raise ample funds from gullible and not so sharp investors. Cheques might go to the wrong account. Quality problems would redound on the other company. Not a comedy, but a tragedy of errors.

In the case of Taylor & Sons Ltd., the disaster was of gigantic proportions. Their whole world came to an end, thanks to a mistake. A company called Taylor & Son, mind you ‘Son’, NOT ‘Sons’, had gone belly-up. As is required by law, this information was duly sent to Companies House, something akin to our ROC. There the trouble started.

The public is informed of such an undertaking being in trouble. It is done to protect the various environments that interact with the fallen company. Creditors begin to stand in line on the first-come first-served principle. Workers try to secure their dues and look for other jobs. Banks clamp down on accounts. Clients begin to look elsewhere. White knights, vultures in shining armour, circle overhead. Shares tumble. Bankruptcy proceedings begin.

There is, simply, no silver lining. No dawn on the horizon. The pit looks bottomless. In short, the whole world comes crashing down.

Now what if you are mistakenly targeted? In our instant study, that is exactly what happened. Taylor & Son tumbled. The Companies House announced that Taylor & Sons was on the brink. And Sons took massive hits.

Mr Davison-Sebry, the top dog at Sons, was holidaying at the time. Concerned that he was escaping the fall-out and shirking his responsibilities, many spewed venom. Orders were cancelled and one of those was our own Tata Steel, a customer giving Sons a monthly business of Rs. 4 crores. They say that troubles never come singly. For Taylor & Sons, they were enough to break its back.

So what did Taylor & Sons do? It sued. Whom did it go after? The Companies House, the perpetrators of that dastardly mistake. And rightly so.

The court was told of the cascading effect on Sons. How in the span of three days, a once thriving company was reduced at ashes. How a 130-year old family business was destroyed. The court, rightly, sympathised with the company. It pointed its finger at one Mr. Davies. Not Davy. No wonder he made that ghastly error.

Taylor & Sons Ltd. was awarded nearly Rs. 90 crores in damages. Which leads us to an intriguing thought. What would the story line be if Jeffrey Archer had thought of it? A sinking company. Finds a pliant clerk. A SMALL mistake. A big upheaval. A court case. And rich dividends.

No one would have believed him because truth is stranger than fiction.

Courtesy: Moneylife