ESSAR Episode

Ruias desperately wants to retain the control os Essar Steel. The company which has been referred to resolution under the new Insolvency and Bankruptcy Code (IBC) has taken a new turn with the promoters submitting a proposal to the Committee of Creditors (CoC) under section 12A at the last minute just before voting on ArcelorMittal’s offer. The LN Mittal-company was earlier declared as the highest bidder in the auction for the steel company in the due process of IBC.

The Ruias’s present offer includes full settlement of the entire claims aggregating Rs 54,389 crore, ArcelorMittal’s offer stood at Rs 42,218 crore, which is Rs 12,187 crore less. In addition Ruias have promised Rs 8000 crore equity infusion! Should the lenders have to settle down for a lower recovery as per rules of the game, is debatable in the court of Law!

Ruias last ditch effort to retain control of the steel company is a clear indication of their desperation. But Section 12A says that the withdrawal of resolution application can happen only before the bidding process starts. Mittal contends that the section is thus not applicable and hence the Ruias offer not acceptable.

The development clearly demonstrates that Ruias are wilful defaulters; if they can pay now they could have paid before but treated the company and its creditors with casual disregard with the belief that they could get back the company at a significant haircut!

The new IBC regime is teaching the wilful defaulters a hard lesson! Let us breath ethical corporate environment in the days to come.

Ruias of ESSAR steels offered to pay the debt in full after the company has been referred to IBC and the final offer by Arcelor was accepted by CoC. Why should the offer be put up so late? To delay the take over by confusing the stake holders when the threat of loosing the control became real. They could have done this in the first place had there been real intent!

Mallya’s offer of settling the dues in Twitter has similar hues… now that the verdict on his extradition by the London court is scheduled to be pronounced this Monday and his fears of being handed over to india is looming large; he may be fearing similar fate of Christien Michel of ‘Augusta fame’. The possibility of the court ruling for his extradition must be frightening to him but even then given to a high-society lifestyle, flamboyance and entitlement, he is seeking special treatment for himself is a different story.

May be there is another sinister move: to weaken the prosecution by claiming vindictiveness as his ‘sincere’ offer to settle was not being considered. He fears that his Indian assets are under threat of being annexed, with him being declared ‘fugitive’ by the trial court.

Also one should note that Mallya has offered to pay the principal and not the accrued interest.! He calls it ‘paying back 100%’! Crooked , you may think.. who is his Indian lawyer adviser? another greater crook entwined himself in many embezzlement cases – our great financial wizard in the UPA cabinet and master of all Indian laws, P. chidambaram.

The new laws, IBC and fugitive economic offenders, enacted by the present regime, are becoming nightmares for these cheats who have been basking under the protection of Congis so far, who once believed that the long arm of law can never reach them in the indian context!

Astrology in a lighter vein

I am reproducing verbatim a column written by subramanian that appeared in ‘mind space’ in Indian express on the belief of certain section of the society in Astrological predictions! East or west, no amount of education can quench the thirst for a peep into the future let alone the beliefs that the evil ‘Grahas’ can be warded off by suitable compensatory actions.

My wife is an avid follower of astrological predictions. The other day, she was listening to a TV programme on which a foreteller was narrating the after effects of the movement of the planet Jupiter. When I set out for my walk, she said, “This year will be better for you than the previous one, because Jupiter is moving to the 11th house in your horoscope.” I smiled smugly and walked with a spring in my step. Who wouldn’t if told of better times ahead?

As I was returning home, a gate of a house opened and out came darting a barking dog. It had taken a dislike of me and charged at me ferociously. I tried to shoo it off.

A couple of pedestrians stood at a distance and advised me to remain still. I believed in the adage that barking dogs do not bite. But the dog was not aware of it. In no time, it sank its teeth into my shin. After it had drawn blood and was poised for another lunge at my limb, the owner came from his house and restrained the dog with a chain. When I bent down and lifted my pantleg to see the damage, the owner asked me, “Did he touch you?” I replied, “He bit me and blood is oozing out.” The owner apologised for the misbehaviour of his dog and said, “Don’t worry. The dog has been administered an anti-rabies vaccine.” As if that would alleviate my pain!

I went home and cleaned the wound and lacerations. My wife insisted that we see a doctor immediately. And so I went. He flashed a torchlight on the bite marks and said, “It is a bleeding wound. This is a category III bite. We should treat it immediately.” I told him that the owner of the dog assured me that the dog was vaccinated. The doctor demurred. “We can’t go by his word and risk a rabies attack, which could be fatal. It is better to play safe.”

He administered a rabies monoclonal antibody injection close to the bite wound on my leg, a tetanus injection on my left hand and a rabies vaccine shot on my right arm. He advised me to come back for four more rabies vaccine shots on the third, seventh, fourteenth and twenty-eighth day. Because all three were muscular injections administered on different limbs, I went home with aching limbs and told my wife, “The soothsayer on the TV was dead wrong.” The wife said, “Think positively. You will be completely safe from rabies virus when you finish the prescribed course of injections. Thanks to Jupiter’s influence.”

Anti-Hindi stance: DMK successfully milched Tamilians

Whether DMK who harvested rich political fortunes by inciting provocative anti-Hindi sentiments, did injustice to the job seekers of the future generations? A big ‘Yes’.. Could a language rich in cultural values and literature be subverted at all by another? But, they could rule the state since late sixties and thrived on the ‘imagined monster’. It is still puzzling how these people could continue to fool for decades?

It is believed that many of the Tamil poets who made made marks in Tamil literary world are multilinguals such as Kambar, kannadasan to name a few. It is a sad fact that many in the present generation are peeved at not knowing Hindi when they compete with contemporaries in the other states. Tamilnadu has a notorious distinction of being the only state where people are extremely handicapped without the working knowledge in Hindi; the nightmares can be only narrated by those who had crossed the borders. This is the only state where there is no one who is ready to articulate (after the demise of ‘CHO’) and can standup against such ‘falsehoods’.

It is stated that the makers of the indian constitution wrote in English though translations in other languages do exist. In case of dispute the interpretation of the English version would be final. They wrote in a totally alien language, yet they didn’t indulge in the nasty conflict on supremacy in Indian languages? Perhaps, Sanity prevailed at that time!

Language being only a medium of communication, why should one be obsessed with the debate on which of the languages is older? Isn’t it any less vulgar than the ‘Crusades and Jihads’ arising from ‘which god is superior’?

Miguel de Cervantes would be giggling from the sidelines as his protagonist ‘Don Quixote’ has been humbled by those who demonised ‘Hindi’ and win successive battles in the political arena!

Is being ‘Right’, Wrong?

Scrapping the Planning Commission was a radical break from the Nehruvian legacy of centralised planning based not entirely on the Soviet model but on a ‘mixed economy’. It is not a mere ruse to get rid of the ‘Left baggage’. What we now have in its place for the last nearly four years, is a ‘Think Tank’, with the best of domain experts in a range of public policy issues, well meaning leaders of industry and academics, called the ‘National Institution for Transforming India’, ‘NITI Aayog’.

NITI is driving the new concepts, models and praxis for a ‘New India’, on technologies that are shaping the way government is designing and implementing programmes: Whether it is ‘Direct Benefit Transfer being implemented across 437 schemes and that has helped save Rs.83,000 crore, digitisation lowering tax collection costs, GST rollout increasing indirect taxpayers base by an amazing 50 per cent, focus on artificial intelligence applications in a range of areas from health to education, the new focus on “blockchain-based smart contracts which will reduce litigation, ot the land registry on the blockchain that will reduce corruption relating to land. As someone calls it, technologies everywhere, ‘from tilling to toilets’!

India is already a huge economy and growing, growing not at the modest ‘Hindu rate of growth’, but to ambitious targets of eight to 12 per cent!

NITI Ayog is changing patterns in a new political context where being ‘right’ may not be wrong!

Corruption – not a vice anymore

Times have changed; Gone are the days when politicians would be shy even if they are affluent and align with the life styles of the downtrodden, at least while in public glare! Over a period, this has changed; now a days they are not even evasive of showing off their filthily richness, but also there are no qualms of convincing the public that it is a virtue of being in politics!

Mulayam Singh Yadav’s younger son Prateek Yadav was proudly posting a photo of his Lamborghini on social media, while Samajwadi party Yadavs struggle for cycles.

If there is one thing you cannot accuse Mayawati of, is modesty. She likes to live life queen size (literally): Take a look at her latest acquisition — a stupendously lavish 71,000 sq ft mansion in the heart of Lucknow. But she is busy showing off her new digs to the media, one more dalit worker, cleaning sewage pipes in Delhi, is brought out dead!

There are Jayalalithaa, Karunanidhis, Reddy Brothers, YSR-Jagmohans, and many more families and their friends in politics who are not shy of their riches…..Indian political landscape has changed far from humility……..?

Cheaters in Tamil Nadu politics

How long one can cheat in politics: as long as one is willing to get cheated….??

In a disclosure which could have repercussions across the political spectrum in Tamil Nadu, senior BJP leader and Rajya Sabha member Subramanian Swamy stated on Friday that Sonia Gandhi, the then Congress president, P Chidambaram, the then Union Home Minister and Velupillai Prabhakaran, the chief of the dreaded Liberation Tigers of Tamil Eelam (LTTE) were hand in glove with each other.

Swamy said Chidambaram had sent a message to Prabhakaran during the 2009 battle (which saw the annihilation of the LTTE) to await Indian Navy to come to rescue him. “Navy did come but it was Sri Lankan Navy. Prabhakaran walked out of the jungle into the beach thinking it was the Indian Navy and hence was killed,” said Swamy in his posting.

At the same time, Indian govt supported Rajapaksa in eradicating LTTE: Rajapaksa, told ‘The Pioneer’ in an exclusive interview that the Governments of India and Sri Lanka had worked in tandem which resulted in the annihilation of the dreaded terrorist organisation. He said, “We had a mechanism during the war, called the Troika, where three officials from both sides (India and Sri Lanka ) were able to discuss any issue, even in the middle of the night”.

This is in stark contrast to the claims by the DMK, then an important ally of the UPA Governnment led by Manmohan Singh. Karunanidhi, the then Chief Minister of Tamil Nadu had said that the Centre had told him that the operation by the Sri Lankan Government was only to nab LTTE chief Prabhakaran and India had no role in the military operations. Karunanidhi had staged a “two-hour long fast” at Marina Beach questioning the then Union Government’s complicity in the civil war in Sri Lanka and had called it off following assurances from the Centre that it had no role in the military operations.

Now comes the shrill cry: ‘Release the convicts….’ let us continue to get fooled….

Narendra Modi successfully imitates Rajiv Gandhi

The Shah Bano case has haunted India time and again whenever the issue of neutralising a court verdict to pacify a religious group arose. When Shah Bano’s husband appealed to the Supreme Court contending that the law permitting maintenance to the neglected wife was against Islam, A five-judge Supreme Court bench rejected the contention. This was in 1985. The Central government, then headed by Prime Minister Rajiv Gandhi, nullified the court’s judgment through legislation and the Muslim Women (Protection of Rights on Divorce) Act was enacted.

Now Prime Minister Narendra Modi has successfully flattered Rajiv Gandhi to perfection by imitating him.

This has reference to the case of Dr Kashinath Mahajan, decided by the Supreme Court on March 20, 2018: An employee of a government-run pharmacy college in Karad belonging to the SC/ST community, on receiving adverse remarks in his annual confidential report, decided to prosecute the author of the ACR, who was not a SC/ST, and lodged an FIR in January 2006. The complainant sought sanction to prosecute his boss under Section 197 0f the CrPC from Dr Mahajan, the acting head of the department, who refused sanction. So a criminal complaint was filed against Dr Mahajan too, alleging that by his action refusing sanction he had committed an offence under the Atrocities Act.

A two-member SC bench, directed reading into the law some safety measures like a time-bound review of the complaint by a superior police officer before directing arrest of the accused and allowing anticipatory bail in cases of apparent false complaints. The immediate pleasure of seeing a targeted accused being arrested was thus denied or delayed to a complainant.

The present government brought in Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Amendment Act of 2018 under persuasion from its alliance partner Paswan. Mr Modi’s projected numerical gain due to the surrender to Mr Paswan is bound to be less even if BSP supremo Mayawati is added to the placated lot. The attenuation introduced by the Supreme Court would have helped that law to last with no loss to the SC/ST.

Narendra Modi has successfully flattered Rajiv Gandhi….

Is NPA problem, a natural outcome of a growing economy?

Is the NPA problem, a natural outcome of a growing economy? It is but natural that one has to lend for earning in banking business; this entails risk…the present euphoria is due to the banking business in india being with the government; as long as you make profit no one would bother but the moment there is a loss, they would hunt for scapegoats… because the voter thinks he owns the bank: ridiculous case of authority without responsibility!

The Parliament’s Committee on Estimates had invited Rajan to brief it on the matter after former Chief Economic Advisor (CEA) Arvind Subramanian praised him for identifying the NPA crisis and trying to resolve it.

Rajan in his written response says, a larger number of bad loans were originated in the period 2006-2008 when economic growth was strong, and previous infrastructure projects such as power plants had been completed on time and within budget. Citing an example, he said “one promoter told me about how he was pursued then by banks waving chequebooks, asking him to name the amount he wanted”.

Unfortunately, he said, that growth does not always take place as expected and the years of strong global growth before the global financial crisis were followed by a slowdown, which extended even to India, showing how much more integrated the country had become with the world. He ascribes policy paralysis in resolving the issues plaguing the stranded projects; he is pained that even now, decision making has not picked up sufficient pace.

Rajan adds, “Undoubtedly, it is hard to tell banker exuberance, incompetence, and corruption apart”. His honest assessment (unlike that of MMS) clears the vision of the other side of the coin.

Bad business decisions are bound to pop up in the future as well and the government in chair on that day would have to face the music.

Why at all should there be so many government banks in the first place doing the same business competing with each other?

DeMo follow ups: Money laundering under scanner

DeMo follow ups: Two ‘smart’ acts of the government would soon bring the illegal activities of money laundering into scanner rather quickly.

One is geo-tagging. The Ministry of Corporate Affairs (MCA) might ask companies to geo-tag the location of their registered offices in the statutory filings with the RoC. Geo-tagging will help the government identify cases in which one building houses hundreds of shell companies. Remember 81 companies In a single room in Hyderabad?

The second one is LEI: The 20 digit global reference number which uniquely identifies a company. Across the world LEI is conceived as a key measure to improve the quality and accuracy of financial data through improved risk management. Money laundered through a web of companies located in different geographies, would be brought under scanner by making the companies with the Reserve Bank of India (RBI) introducing a Legal Entity Identifier or LEI for all the registered companies. Global Legal Entity Identifier Foundation (GLEIF) is the regulator of LEI.

So Gitanjali Niravs and Satyam Rajius would have to consult PC to find new ways of syphoning and laundering! He is the one who virtually challenged that it is impossible to weed out black money and prove it in the court of law as well!!! They can either approach him directly if he is out of power or consult BC if he is in power!!

“Only lawyers and painters can turn white to black.” – Japanese Proverb

NPA monster – UPA’s making?

How much of the following is true – pundits to ponder?

The biggest scam in the history of India is not the commonwealth scam (Rs 50,000 crore), 2G scam (Rs 1,76,000 crore) or Coal block allocation scam (Rs 1,86,000 crore) – it is the systematic creation of NPA (Non Performing Assets) of public banks that was created between 2008-2014.

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❓ How did it unfold?

➤ In the period of 60 years between 1947 and 2007, the value of total amount of loans lent by the public banks was Rs. 18,00,000 Crore (18 lakh crore).

However, the total amount of loans lent by the banks in the next 6 years (2008-2014) was a whopping Rs 52,00,000 crore (52 lakh crore). The UPA2 started to distribute loans to its cronies despite the fact that most of them were wilfully defaulting on loans !!!! 😮 😮

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❓What happened ?

➤ Banks were forced to lend loans to those industrialists, who were close to “the family”. A single phone call from 10JP would make sure the industrialists received as much loans as they wished!

Once the loan was granted, and the industrialist was not able to repay the loan, the banks were asked to again lend a loan of similar amount. This money was used to repay the previous loan, and this cycle kept going on.

For example, Banks lent Mr.X a loan of Rs.1000 crore. Mr.X would default on the loan and then approach the dynasty. A phone call would make sure banks lend another Rs.1000 crore to Mr.X. Now he would repay part of the previous loan with this amount and ask for more loan. The bad loans, would therefore, continue to accumulate.

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❓ Was it all ?

➤ However things didn’t stop here. The UPA2 government continued to disburse the loans to those cronies who it knew are not going to repay the loans. This includes former Congress Rajya Sabha Member and businessman Vijay Mallya. All the loans on which Mallya wilfully defaulted were given to him under UPA rule.

The UPA government continued doing this at brazenly unabated pace and the amount of bad loans kept increasing with every passing year, and almost 10,00,000 CRORE (10 lakh crore) became Non-performing asset – the money which could NEVER be recovered….. The entire amount that were distributed to these cronies of 10 JP was our (taxpayers’) money.

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❓ What was more to this scam ?

➤ The scam didnt stop at this point. The UPA2 government hid the real amount of NPAs and claimed the amount was Rs 2,00,000 crore (2 lakh crore), much less than the real amount of 10,00,000 crore. The UPA lied to the entire nation just so that it can continue distributing our hard-earned taxes to its cronies. This was the government of an “economist” cheating the entire nation, lying about the bad loans just so that it can continue giving loans to its cronies.

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❓ How did the truth come out ?

➤ When Narendra Modi assumed office in 2014, the entire system was reeling under this volcano which was about to burst any time soon. The first thing Modi did was to order the banks to come clean on NPAs and declare every amount that had turned into a bad loan (loan which could not be recovered). As banks started to come clean, the amount turned out to be an unbelievable Rs 10,00,000 crore. The current government started taking concrete steps to solve the issue and strengthen the banking system.

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❓ Why NPA is still increasing then ?

➤ As more and more banks started to declare the NPAs of 2008-2014 period, the value of NPAs started to increase. That is the reason why NPAs rose from 2 lakh crore in 2008 to 11 lakh crore in 2017. The truth is – NPA did not rise. It simply was made transparent and declared to public. NPA had already touched 10 lakh crore in 2013 but UPA government lied to the nation.

With every passing year, the interest on the loans keep accumulating (since banks continue to calculate interests on those loans even today), and hence the NPAs are still increasing every year. These are all the loans which were given by UPA in the period 2008-2014. After Narendra Modi Ji came to power, all these have been made public and investigations have started.

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❓ What has Modi government done ?

➤ The Bankruptcy act and Economic Offenders act have made sure that the amount is being recovered from those who wilfully defaulted on loans and ran away. All the loans are being investigated, and from now onward, every loan of large amount will be provided only after securing passport details of the applicants so that they cannot run away in case of wilfully defaulting.

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❓ Why did the government not tell about it in 2014/15 ?

➤ Had the government declared the entire truth right in 2014/15, it would have helped BJP politically, but it would have destroyed the economy of nation. The trust on banking system would have eroded completely and economic activities would have come to a grinding halt. The entire economy would all of a sudden go into a downward spiral and banks would have collapsed. Only after everything was strengthened did the government undertake the task to bring the truth out in the public.