Scam
May 5, 2011
The Tata Group which is known in India for high standards of corporate governance and doing business ethically in a country steeped in corruption too seems to have fallen.Ratan Tata appeared blemished as tapes of his conversations with the now disreputed corporate lobbyist Nira Radia were published in the media.He was caught at least listening and agreeing the the open manipulation of the Indian ministries in government formation if not the architect.Tata Teleservices which was a major beneficiary of the second round of 2G Telecom Auction during Raja's tenure has now again appeared in the news for the wrong reasons.Despite denials by the Tata Group honchos,the Tata companies seem to be complicit in the billion dollar scam that has shaken the political and business roots of India.
May 2, 2011
Lavasa is a story of corruption,looting of the poor and raping of the surrounding environment by the Indian politician-bureaucrat-businessmen nexus in a beautiful cover of a township built for the rich and well heeled.There is little concern for the law as these powerful developers know that they can get away with murder quite literally.The long term sustainability of the township is in doubt which defeats the entire purpose anyway.Any buyer of property in Lavasa should be aware of these problems and should not buy it as their investment will be eroded in the future anyway besides having the taint of being looted from the poor.However the media too has lost interest as a new scandal emerges everyday.
Lavasa Township being constructed near Pune,Maharashtra has been in the media off and on for creating a environmental disaster in the shape of a beautiful township constructed on the hills.The town which has been constructed for 300,000 residents has violated all building and environmental norms of the state and centre.With powerful politicians and businessmen backing the project,its not as surprise that the state government of Maharashtra actively helped the township in bypassing all the laws and regulations.There is no provision for permanent water supply and it would lead to a clash between the water wants of Lavasa and Pune.Note builders in India are notorious for leaving out water and waste sustainability in their plans.The residents of the buildings,apartments and other shelters have to bear the brunt later on when there is no water and problems like waterlogging.Gurgaon the millenium township suffers from both of these problems quite acutely.Note these problems are common to both million dollar homes as well as slums in India.
April 25, 2011
India has lately become a nation known for endemic corruption rather than the world's poster growth boy with the ruling party members implicated in a number of corruption scams.With the government reluctant to take action against its own,the Supreme Court was forced to take over the supervision of the investigating agency CBI.In the first chargesheet top corporate honchos and CEOs were put under arrest alongwith the former telecom minister Raja and his cronies.With the ruling party under pressure from a civil society movement against corruption,the ability to manipulate the investigation process is limited.Not that the government is not trying put impediments in the court cases and top ministers and leaders indulging in character assassination of the eminent social activists like Santosh Hedge and others.This comes even as other chief ministers of the Congress like Gehlot get caught in nepotism.
April 22, 2011
The Congress Party and its leaders can't stop being caught in corruption scams and instead of trying to correct them,they slander and character assassinate civil rights activists who try to bring about an anti-corruption bill in the country.The Adarsh Housing Scandal in which the Congress Chief Minister in Maharashtra was involved had to resign though no jail time for him or for his associates.The Scam which also involved top bureaucrats,Corrupt Indian Military Generals and other sleazy officials has died a natural media death as fresh scams take their place.Not that the Opposition party BJP is any better with its Karnataka Chief Minister failing to resign despite being accused of a number of scams.Note the Karnataka Ministry of the BJP has robber mining barons as top ministers who have made billions of dollar through illegal mining of iron ore.
April 22, 2011
India's Oil and Gas Industry has an interesting mix of Oil & Gas companies from the government and private sector.Except for some companies providing ancillary and drilling services,most of the companies are huge with billion dollar balance sheet and huge operations as is the case with the Oil and Gas Industry worldwide.Except for Reliance Industries,the upstream sector of oil and gas production and distribution is dominated by government owned companies which are heavily regulated.Despite attempts at liberalizing the APMC and the operations of the PSU Oil Companies,HPCL,BPCL and IOC run billions of dollars in losses as they are forced to sell oil and gas products at below their cost.The government's policies are mostly ad-hoc compensating these companies through bonds and money transfers.It is quite strange as the minority investors are forced to pay for government subsidies for energy.India's Oil Subsidies has led to the flourishing of a massive Oil Mafia which does not think twice before killing government officials and has led to poor outcomes for the country.Despite this government stupidity,some government companies like GAIL,OIL India and ONGC which operates in the production and have to bear less of the subsidy burden have grown and performed admirably.In the private sector companies like Reliance,Aban,Great Offshore,Essar have managed to grow rapidly as well with varying degrees of success.Here is the list of the major Oil and Gas Companies in India.
April 22, 2011
Indian Politicians after being forced to bend against the popular support received by Anna Hazare and other civil rights activists in the recent fast unto death […]
April 19, 2011
The Indian telecom industry is the world's fastest growing industry with 792 million mobile phone subscribers as of February 2011. It is also the second largest telecommunication network in the world in terms of number of wireless connections after China. The industry will reach around $80 billion in revenues by next year showing an astounding CAGR of over 25% and will employ a stupendous 1 crore employees making it one of the biggest value creators in India in recent times.However the telecom companies in India after enjoying a boom period in the early 2000s have faced a couple of tough years with hypercompetition leading to a price war in auction of 3G spectrum.This was followed by one of the most high profile corruption scandals in the country which resulted in the jailing of the former telecom minister in the 2nd auction of 2G spectrum.Most of the telecom companies have been found to be implicated in colluding with sleazy politicians/bureaucrats in looting the Indian taxpayers.India Real Estate Sector is one of the most corrupt in the country and after the 2G Scam,the telecom sector is giving it close competition for the No.1 spot in corruption
April 15, 2011
Nira Radia the millionaire lobbyist who became a public figure overnight as tapes leaked to her phone conversations were printed by the mass media has revealed sordid details about the politician businessmen nexus.In the chargesheet presented by the CBI to the Supreme Court she has revealed the multi billion dollar realty company DB Realty is a front for Sharad Pawar and controlled by him.This hardly comes as a surprise as powerful Agri Minister Pawar has been linked to a number of corruption scandals like the Lavasa Scandal,2G Telecom Scam,IPL Scam etc.Note DB Realty CEO has been directly implicated in the transfer of bribe giving to Raja the former Telecom Minister in exchange for a Telecom License at dirt cheap prices.It is a tribute to the power of Pawar that despite such massive circumstantial evidence against him and his family,there has been no court case or police charges against him.Note a number of big companies in India are known to be secretly owned and controlled by powerful politicians.Not that politicians don't own billion dollar businesses openly and use their political muscle to further their own interests in a blatant manner.
April 10, 2011
Real Estate Prices in India have gone through the roof crossing the highs they made during the 2008 run-up.Note real estate in a lot of places globally are in a bubble right now - China,Australia,Canada .However the India Real Estate Bubble is seldom talked about as it has not reached the levels reached for example in China.However the property prices are becoming increasingly irrational.The causes of the Real Estate Prices increases in India are mostly due to the fact that Market Forces are not allowed to operate freely.The regulations,corruption,lack of transperncy,vested interests,cultural factors all have a role to play.Here are some of the reason that I think Real Estate Prices are totally irrational in India.Readers of this Blog are urged to add their views as this is a complex discussion and many people will say that Real Estate in India in not a Bubble but a result of High Population Density,Demand,India's Economic Growth .
April 8, 2011
The Government of India has been trying to put hurdles in the 2G Telecom Scam case right from Day 1.Its blatant shielding of the rich and powerful involved in the massive billion dollar corruption involving ruling party alliance members and top corporate houses has been apparent.The proof of the government malintentions was India's top court taking over the supervision of the investigation agency CBI with itself.This was a major slap for the government as CBI falls under the authority of the Home Ministry.With the CBI having filed a chargesheet which names the former Telecom Minister Raja and some billionaire businessmen,the government is again trying its stalling tactics.The government and its repsentative lawyers did not agree to the name of U U Lalit as special public prosecutor.Additional Solicitor General (ASG) Indira Jaising raised objections despite K K Venugopal, who has been appearing on behalf of CBI and ED suggesting his name.
April 5, 2011
India’s Civil Society has brought out the Jan Lokpal Bill that has been drafted has been drafted by eminent members of the civil society like Prashant […]
April 5, 2011
The Jan LokPal Bill is supposed to be the answer to India's massive endemic corruption which strikes daily in the form of a new scam or scandal.The government has proven to be woefully inadequate in taking on the corrupt politicians,bureaucrats and businessmen.This corrupt nexus has been repeatedly exposed and its structure exposed through the Nira Radia Tapes.The Indian administration has shamefully failed to take action only promising to do something without doing anything worthwhile.The Indian Judiciary has also castigated the government numerous times for its abject failure in the 2G Telecom Scam,Black Money Scandal etc.However the government instead of strengthening anti-corruption measures has only put obstacles in the way.Its no wonder when the committee meant to look after the Bill comprises of ministers tainted with a number of scams themselves.Anna Hazare has held a fast unto death to put pressure on the government to pass the draft bill but the Minister appear unconcerned.Here is a short summary and guide to the main points of the Jan LokPal Bill which IMHO deserves the support of the whole Indian civil society.
April 4, 2011
Increasing Oil Prices is the biggest Achilles Heel of the Indian Economy heavily dependent on imported oil products.The government will have to either raise the prices leading to adding fire to the already high inflation or compensate the badly bleeding half privatized Oil Companies like IOC,BPCL and HPCL.These companies generally make massive losses despite having private investors apart from the government.Compensating these losses would lead to a higher fiscal deficit which would add to the inflation pressures anyway.Note a recent survey revealed that the Indian Middle Class has cut its expenditure on shopping,eating out and entertainment by a whopping 65% due to the high inflation.However the Indian Stock Market has seemingly discounted all these factors going up by 10% in 10 days on the back of a global rally.Bernanke Fueled Cheap Money is Circulating Hungrily across the Globe and currently India seems to be the fashion trend of the month.Note these hot money flows can reverse equally quickly leading to a sharp market crash just like the Jan-Feb one as fundamentals hardly support this kind of rally.With government intervention and distortions becoming the overriding factor in the stock markets,Free Markets and Fundamentals have taken a backseat.
March 29, 2011
It remains to be seen whether the top corporate executives of India's topmost conglomerates get prosecuted over these wrongdoings.Essar and ADAG are amongst the top 10 conglomerates in India with wide ranging operations with billions of dollars in revenues nationally as well as internationally.The Supreme Court has been instrumental in bringing this case so far as the government seems totally coopted by corruption.It has been frequently been castigated by the Supreme Court and has shamelessly defended corrupt bureaucrats and politicians.It remains to be seen how this 2G Telecom Case ends.If justice is done,then it may provide a new chapter to India's corruption ridden story till now.
March 28, 2011
India's Supreme Court castigates ED for incompetence on Black Money Hasan Ali Hawala Corruption Case
India’s Supreme Court has become a schoolmaster for the errant Indian investigative agencies which keep showing glaring incompetence and reluctance to go after top offenders.The Indian […]
March 19, 2011
Wikileaks has not only caused problems for the US by exposing its diplomatic cables but has caused consternation and embarassment in almost all countries.Leaders of a lot of countries have got exposed for their hypocrisy and doublespeak.In fact Wikileaks also contributed to the current unrest in the Middle East by revealing the extravagance and corruption of the ruling regimes in Libya and Egypt.The same script is now being played out in India as well where a leading newspaper the Hindu has partnered with Wikileaks in printing the sordid details related to India.
March 17, 2011
The Wikileaks Cable says that an Indian Official Nachiketa Kapur showed an Embassy Staffer Two Chests filled with millions of Ruppees in Cash meant for bribing legislators.This corruption scam is the latest in a series over the last 6 months or so.Already India's previous Telecom Minister is cooling his heels in Jail and crucial leaders of the ruling coalition have been questioned in the 2G Scam.Most of Indian corporate chieftains have also been implicated in the Telecom Scam with mudslinging in full flow.India's Foreign Policy is being made by such crass and corrupt leaders is a shocking revelation though nothing new.Earlier Jharkand state had seen its legislators convicted of accepting bags full of cash during the earlier Congress regime.So this means that bribing and making Indian Policies is not a new thing.India's Opposition Parties are making a huge hue and cry and demanding the PM's resignation.
March 4, 2011
Income Inequality and unemployment amongst white collar workers is a massive growing under-appreciated problem in India and China.These countries despite growing tremendously have built in severe distortions which are only becoming bigger by the day.Graduates in both countries increasingly find a massive demand deficit for their services while income inequality grows bigger as billionaires build billion dollar houses amidst people earning less than $2 day.
February 28, 2011
Indian Stock Markets are full of stock market manipulators and operators trying perennially to loot the small investor with the regulator SEBI mostly turning a blind eye.Pump and Dump IPO issues,circular stock rigging in small caps,corporate governance issues in even large companies are quite endemic.Investing in the Indian markets is a very hazardous activity for the small investor.Its not only the Indian companies but also large reputed MNCs who also keep pulling fast ones on the minority shareholders.The Cairn-Vedanta deal is a recent example where the promoters are rewarded at a higher premium in takeovers through legal shenanigans by large corporate groups.
February 28, 2011
The Indian Stock Market Regulator SEBI has been seen doing nothing against blatant market manipulation and stock rigging scams.Mid cap and Small Cap Stocks are havens for rigging by promoters and stock brokers as SEBI seemingly does nothing.Even in the primary market,junk IPOs rule the roost with even the recent correction failing to see crap stocks making a debut (Sudar Garmets,Fineotex,Omkar etc.).To anyone with a modicum of common sense it is apparent that such low quality companies could not raise money without manipulating the markets.However SEBI in its infinite wisdom remains blind to this.Stock brokers like Ashika,Dangi continue to operate unimpeded despite being indicted for scamming.Even reputed stock brokers are involved in underhand and shady dealings.However SEBI does nothing indirectly encouraging fleecing of small and retail investors.Not that big investors like Goldman,GMO are immune to fly by night operators as well.
February 28, 2011
Corruption in India has taken massive proportions with a new scam being unearthed almost every day .However this has not metered the architects of corruption in India from continuing their looting spree.While the 2G Telecom Scam throws up new looting revelations,newer corruption scams are also competing for newspaper inches.Investing in the Indian stock markets is at best a hazardous activity with most of the promoters trying to fleece shareholders.Mid cap and small cap scams have already resulted in massive losses.Now investing in India's largest companies belonging to the main Nifty Index has also become dangerous.While the scam related to the ADAG Group has already resulted in 80-90% fall from the peaks of the companies of this group,others are joining in.Nalco which is a government owned integrated aluminum producer was thought to be one of the safest companies to invest in.However even this company has fallen.The CEO of the company was found taking bribes in the form of gold bricks in return for favors.
February 18, 2011
Note it would not be surprising if the allegations were true as the Indian stock market is a pump and dump heaven of IPOs with blatant manipulation by market operators.Price Rigging Rings are also present with mid cap and small cap scams happening with an alarming regularity.With Corruption touching a new high,the Supreme Court has taken over the investigation of the Telecom Scam Probe from the Government.This has led the CBI which is mostly a ruling party puppet to question some top billionaires and politicians.However it remains to be seen if some of the top fish are caught or just some small scapegoats are imprisoned.
February 15, 2011
The recent Supreme Court case dealing with the phone tapping of a political leader who has fallen on bad days has revealed an astounding fact.The Indian Government taps more than 100 phones a day just from a single telecom operator.When the Supreme Court castigated Reliance Telecom for tapping the phone based on a phony letter full of bad grammar,the operator revaeled that it had recieved requests to tap 150,000 phones over a period of 5 years.This reveals a massive systematic abuse by the government of its powers.This sort of behaviour seems more like that of a police state like Egypt rather than a flourishing democracy.Talking on the mobile phone has suddenly become a dangerous activity as Big Brother Indian government is listening to most of the country's communications.The recent Nira Radia phone tap leak shows the complete respect for privacy.It is not only the government,the service providers in the country have scant respect for your privacy.Telecom operators,Banks,Travel Agencies will sell your information for a pittance to marketing agencies.Telecom operators will not only sell your information but also the list of all your contacts.
February 15, 2011
Insider Trading is quite rampant in India particularly in mid cap and small cap companies where promoters frequently collude with market operators in rigging up stock […]
February 14, 2011
The Liberalization of India in the 1990s ushered in a new era of not only high growth as its industries and enterpreneurs were unshackled from the chains of License Raj but also an era of Crony Capitalism.The erstwhile business barons who maintained their fiefdoms through manipulation of licenses,now shifted their focus elsewhere.With new sectors of the opening up and growing exponentially unscrupulous promoters had the chance to mint billions.The bursting of the 2G Telecom Scam has bust the cozy Crony Capitalism Relationship.India's Supreme Court reposing lack of faith in the investigative powers of the government has personally taken charge of the prosecution.With powerful ministers,bureaucrats and billionaire businessmen involved,only India's Supreme Court has the chance to bring the guilty to justice.
February 14, 2011
This time India's Space Research Agency ISRO has come under the scanner for giving a sweetheart deal to a private company without bidding and tenders.This has resulted in another huge loss for the public treasury just like the Telecom Scam.The Space Agency comes under the direct authority of the Prime Minister and has further muddied the waters for the ruling coalition.With scam per day performance,the government is under tremendous pressure and losing its way in reforming the economy.Corruption in India is literally taking on Galactic Proportions and showing no signs of stopping.The Devas-Antrix Deal has also foreign investors which makes scrapping the contract for giving spectrum to Devas difficult.With India's Supreme Court breathing down its neck over prosecuting the guilty in the Telecom Scam,the government finds itself besieged.It can hardly afford opening another corruption frontier when it already finds its hands full with the existing scams.
February 7, 2011
Indian Stocks Market are a very difficult place to invest despite claims to the contrary which will be made by institutional investors.The all pervasive corruption present amongst most of the company managements makes bottom up stock picking a tough call.Even institutional "smart" investors like Goldman,GMO frequently get tripped by fly by night operators.Market operators blatantly manipulate stocks while the primary market is a "pump and dump" heaven.However the Indian growth story has fooled fund managers from outside to keep investing into the story.I have written in the blog numerous pitfalls present in investing in India.Some of these are coming home to roost as the Indian stock markets have fallen by more than 10% in 2011 despite other markets making new highs.Here are the top 5 Headwinds facing the Indian markets in 2011.
February 7, 2011
These 3 Indian companies DB Realty,Sun TV,Spice Jet have very little to relate to each other.One is a real estate company,one is one of the fastest growing media companies while the third one is one of the biggest low cost airlines in which Wilbur Ross was an investor.The common thread running through these companies is their association with a regional political party in India at the center of a massive billion dollar telecom scam in India.The leader of this party Raja was recently sacked from his post as the telecom minister and has now earned the dubious distinction of becoming the first minister to get jail time from his own government.Corruption Scandals have ruled the roost in the last 6 months frequently leading to huge stock price drops.Small Cap,Mid cap scandals,insider trading,bribery rings have all been documented by this blog which led to huge losses for investors.
February 7, 2011
Switzerland is one of the richest,most developed countries in the world hosting one of the biggest financial centre in the world and home to two of the largest banks UBS and Credit Suisse.Switzerland has been long been regarded as a neutral safe haven for money with the its currency Swiss Franc thought to be a risk averse store of value.Switzerland is known for its excellent banks which provide a high quality of service and safety.But the less publicized fact is why this small mountainous country attracts trillions of dollars in wealth from around the world.Its because of its secrecy laws which don't allow the name of the bank account holder to be revealed unless its proven that it is due to criminal misconduct.This Law has made Switzerland the safe haven for all kinds of criminal wealth including drugs,guns,prostitution,genocide etc.The recent spat between USA and Switzerland over the revealing of US tax evaders brought this anomaly into the open.Switzerland is the only large country to have such a law which promotes crime and tax evasion globally.
January 25, 2011
The Indian government has been rocked by a series of corruption scandals which have been documented in this blog.The scandals have not only touched the political sphere but also the stock markets.The scams have not stopped with new ones being reported almost on a daily basis but no convictions have happened.The corrupt and the guilty keep on going about their business as usual as the Indian ruling party thinks it can cure corruption with words.The Congress Party in its annual meeting had said that removing corruption would become its top priority with expeditious proceedings against public officials in graft cases.However the law has been criticized as having too many loopholes even before being passed.Even the actions of the government does not inspire much confidence.The Commonwealth Games which was a much publicized national corruption scandal has yet to see a single prosecution.The guilty officials have managed to all get bail with the Suresh Kalmadi the scandal in chief goes about his business as the powerful ruler of the Indian Olympic Committee.All the government has done is to remove him from the post of the Chairman of the Organizing Committee of the CG .Note this is already a dead body with the Games over a month ago.Note Kalmadi is a leading party member and despite his obvious corruption the government refuses to move against him.