The terrorist outrage in Bombay on Wednesday became only too real for the chief executive and senior board members of Unilever. They had to barricade themselves in a private dining room at the Taj Mahal hotel and then smash a window in a dramatic escape.

Patrick Cescau, the Frenchman who is chief executive of the food and soap combine, and his successor, Paul Polman, of the Netherlands, were among the guests at a formal dinner party organised by Hindustan Unilever, the European giant’s Indian subsidiary.

The intimate gathering was an assemblage of present and future power at a company that is a titan of Western capitalism, making world-famous brands such as Omo detergent, Dove soap and Ben & Jerry’s ice cream. The chief and the chief-in-waiting were accompanied by another Unilever board member, Harish Manwani, who is also chairman of Hindustan Unilever. He was joined by Nitin Paranjpe, chief executive of the local company.

It was to be a farewell to Mr Cescau and a welcome to Mr Polman at India’s most glittering venue. The hosts, who count among India’s corporate elite, were accompanied by their spouses and it was not until the dinner was well under way that the guests heard gunfire and were plunged into commotion. Instructed by the hotel staff, they turned out the lights and used furniture to barricade the door.

According to accounts in the Indian press, they crouched on the floor in silence as the sound of gunfire came nearer, hoping that the militants would ignore the darkened room. When smoke began to fill the room, they smashed a window for air. Between 3am and 4am firefighting teams reached the windows and helped the Unilever party to escape down ladders.

“It was awful,” a Unilever spokesman said. “They were pretty shaken.”

None of the Unilever party was injured and they suffered a narrow escape. There is no doubt that a different outcome would have been regarded by the terrorists as a strike against a British company that has deep roots in India. Unilever has a big commercial presence in Asian nations with large Muslim populations, such as Malaysia and Indonesia.

Bombay’s stock market suffered sharp falls when it opened yesterday, then steadied as investors took confidence that the Indian economy would not be damaged by the terrorist assault at the heart of the country’s financial centre.

The rupee came under pressure, falling a percentage point against the dollar, and airline and hotel shares plummeted, but the market recovered its composure later. Bombay’s BSE index ended higher, up 0.7 per cent, as confidence rose amid hopes of further action by India’s central bank in cutting interest rates.

Shares in Indian Hotels, owner of the Taj Mahal and the scene of the worst violence over the past two days, fell by 17 per cent as the market opened after a full day’s closure. Jet Airways, the leading domestic airline, and Kingfisher Airlines, its main rival, both suffered share price falls of about 6 per cent.

Palaniappan Chidambaram, the Indian Finance Minister, said that the attacks in Bombay would hurt investor sentiment in the short term, as the Government revealed data showing a marked slowing in India’s economic growth rate. The Indian economy is growing at its slowest pace for four years, with GDP advancing by 7.6 per cent in the three months to September, compared with the third quarter last year. High interest rates, the credit crunch and capital outflows have slowed down the Indian juggernaut and the rate of growth is well below the second quarter’s rate of 7.9 per cent.

Bijal Shah, global markets strategist at Société Générale, said that India’s economy was too large and diverse to be badly affected by the events in Bombay. Foreign investment would quickly return to India, he said, attracted by low costs, the weakness of the rupee and a growing consumer sector. “[The attacks] may have a short-term negative effect on companies wanting to secure the safety of foreign personnel,” he said, “but India is a much more competitive market for manufacturers. Its market share will improve significantly.”

India’s growing tourism sector is likely to be affected, but even that is unlikely severely to harm growth prospects. “It’s not a huge chunk of the Indian economy. India is able to absorb these shocks,” Mr Shah said.


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British Airways refused to be diverted



British Airways has received a boost to business after the chaos in Bombay (Ian King writes). Along with Virgin Atlantic but unlike most big European carriers, BA has continued with its scheduled service, flying from Heathrow on Wednesday night even as news of the terror attacks was breaking.

A spokesman said that, like Virgin Atlantic, BA was allowing customers who had already bought flights to Bombay to rebook to alternative destinations in India at no extra cost.

Cathay Pacific, which runs three flights to and from Bombay daily, has also waived its usual re-booking and re-routing charges to customers. Jet Airways, which flies direct to Bombay from Heathrow, is offering free cancellations on flights until today and is offering free re-routing, as is Air India.

Lufthansa cancelled two flights to Bombay from Frankfurt and Munich on Thursday but resumed its service yesterday. Air France, which had 20 cabin crew rescued from the Oberoi hotel yesterday, also cancelled two flights on Thursday. Alitalia has cancelled all flights until further notice.