"It would be better and in their interest to appear before the court. People do not follow my advice and then they suffer," special CBI judge OP Saini said after they did not appear personally before him and were represented by their lawyers
New Delhi: Essar Group promoters Anshuman and Ravi Ruia, accused in a case flowing out of the second generation (2G) spectrum scam, were today directed by a Delhi Court to appear in person before it with a warning they would suffer if they do not do so, reports PTI.
The warning came from special CBI judge OP Saini after the Ruias and Loop Telecom promoters IP Khaitan and Kiran Khaitan also failed to turn up at the hearing today.
"It would be better and in their interest to appear before the court. People do not follow my advice and then they suffer," the special CBI judge said after they did not appear personally before him and were represented by their lawyers.
The judge allowed their plea for exemption from personal appearance for the day after their counsel said the matter regarding jurisdiction of the special court in taking cognisance of the CBI charge-sheet against them was pending in the Supreme Court.
The court has now listed the matter for further hearing on 31st March.
During the hearing, senior advocate Mukul Rohatgi, appearing for the Ruias, said hearing in the apex court would continue in the next week.
"The hearing in the Supreme Court on jurisdiction has started and it (hearing) is kept for next Friday. Kindly give us three weeks time," Mr Rohatgi said.
The court, however, said it would not give time to them on the ground that matter is pending before the Supreme Court.
"You will get the time but not on this count (that matter is pending in the apex court) only," the court said.
On this, Mr Rohatgi said the accused were seeking exemption on the similar grounds which they had cited on 22nd February when they had sought exemption from appearance in the court.
On 22nd February, Ruias and Khaitans had sought exemption from personal appearance on the ground of their presence in UAE while the Khaitans pleaded additional ground of poor health.
Meanwhile, Vikas Saraf, Essar Group director (strategy and planning), also a co-accused in the case, today appeared before the court.
The CBI, which was expected to file the reply on Mr Saraf's bail plea, told the court that they would do so after bail pleas of other accused are also filed in the court.
The court asked the CBI to file its reply on bail plea of Saraf on 31st March, the next date of hearing.
Mr Rohatgi also told the court that scrutiny of documents supplied to them along with the charge sheet was complete.
Essar group promoters Anshuman and Ravi Ruia and Loop Telecom promoters Kiran Khaitan, her husband IP Khaitan and Essar Group director (strategy and planning) Vikas Saraf were named as accused by the CBI in the third charge-sheet filed in the court on 12th December last year.
The five have been charged with cheating the Department of Telecom (DoT) by using Loop Telecom as a 'front' to secure 2G licenses in 2008.
The CBI also named Loop Telecom Pvt Ltd, Loop Mobile India and Essar Tele Holding as accused.
It has alleged that Essar, which already had a stake as an existing telecom operator, created a front company Loop Telecom to secure additional 2G spectrum which was in contravention of the telecom policy.
They were slapped with offences only under the IPC as the CBI did not find enough evidence to prosecute them under the Prevention of Corruption Act.
Essar, which has denied any involvement in 2G case, contended the special court cannot proceed against them as they were not charged under the Prevention of Corruption Act.
Nifty may see the level of 5,195
The market closed flat with a negative bias as the status quo by the Reserve Bank of India (RBI) by keeping key rates unchanged and the budget, which estimated a higher fiscal deficit for the next fiscal and a hike in service tax, put off investors.
The Sensex closed 37 points (0.21%) lower at 17,466 and the Nifty ended the week at 5,318, down 16 points or 0.29%. Friday's market move was one of the signs of increasing pressure for selling. If the bulls don't make a comeback from the current level, we may Nifty headed towards 5,195.
The RBI's CRR cut on Friday saw a positive opening on Monday but nervousness ahead of the Union Budget resulted in the market closing with modest gains. Sustained buying by institutional investors and a positive global trend led the market higher on Tuesday. A rise in headline inflation for February overshadowed the Railway Budget leading to a positive close, but with a diminishing strength.
A status quo by the central bank in its quarterly policy review on Thursday resulted in the market snapping its four-day gaining streak and closing in the negative. Worries about the high fiscal deficit, as highlighted by the finance minister in his Budget speech, and a rise in service tax led the market lower on Friday.
In the sectoral space, BSE Fast Moving Consumer Goods gained 3% and BSE Auto rose 1% while BSE Consumer Durables and BSE Realty were down 2% each.
Among Sensex stocks, GAIL India (up 5%); Hindalco Industries, ITC (up 4% each), Tata Motors (up 3%) and Hero MotoCorp (up 2%) were the top gainers. The losers were led by Sun Pharma, DLF, Bharti Airtel (down 4% each), ONGC and TCS (down 3% each).
The top five stocks on the Nifty were GAIL India, Hindalco Ind (up 5% each), ITC (up 4%), Ambuja Cements (up 3%) and Maruti Suzuki (2%). The main laggards were Cairn India (down 8%), Sun Pharma, DLF (down 4% each), ONGC and Kotak Mahindra Bank (down 3% each).
Finance minister Pranab Mukherjee, in his Budget speech, raised the income tax exemption limit from Rs1.8 lakh to Rs2 lakh. Further, income between Rs 2-Rs5 lakh will be taxed at 10%; income between Rs 5-Rs10 lakh will be taxed at 20%; and income above Rs 10 lakh-the tax will be 30%.
He also hiked excise duty and service tax by 2% across the board to raise Rs45,940 crore. Prices of all non-oil goods are likely to go up due to the 2% rise in the effective rate of excise duty of 10% and service tax as well as on account of the widening of tax net to all services, except 17.
With inflation remaining high, the RBI on Thursday kept interest rates unchanged for now, but made a promise that cost of borrowing will come down in future. The benchmark policy interest rate (repo rate) at which RBI lends to banks has been kept unchanged at 8.5% and the cash reserve ratio (CRR), the portion of deposits banks need to keep with RBI, has been retained at 4.75%. This rate was reduced last Friday (10th March) by 0.75 percentage points to infuse Rs48,000 crore in the system to ease liquidity.
In international news, the European Financial Stability Facility (EFSF) will contribute 109.1 billion euros ($142.60 billion) to the second Greek bailout after covering the costs of the Greek debt swap, the EFSF's chief executive Klaus Regling said. The second bailout for Greece, funded by the EFSF, comes on top of the fund's assurances to Ireland and Portugal, the two other Eurozone countries that have been cut off from the markets and need euro zone loans to avoid bankruptcy.
The US consumer price index increased 0.4% in February, mainly on a rise in gasoline, according to the Labor Department. Excluding the food and energy category, core CPI edged up 0.1%. Experts fear that the rise in energy costs would hinder the economic recovery.
The wrong face of capitalism
I met Dr Kaushik Basu a quarter century ago in the living room of an old bungalow in an elite area of Kolkata with a senior colleague of mine to understand the implications of the first stirrings of economic liberalisation started by Rajiv Gandhi. Dr Basu was then a young brilliant economist and regarded as one of the brightest minds in economics; his mentor was none other than Amartya Sen under whom he did his PhD at the London School of Economics. Dr Sen’s concern—economics with equity—has been the concern of Dr Basu as well.
Economists for equity have fought a hard battle for almost 30 years since the early 1980s when Ronald Reagan became the US president, Margaret Thatcher became the prime minister in UK, the Berlin Wall fell and the whole world, including China, turned right. The politics of a period influence which economic orthodoxy would dominate. After the demise of Soviet Union and capitulation of China, what prevailed was the ‘Invisible Hand’ of the market, under which individual self-interest of exchanging goods and services supposedly leads to greater social good. While this is somewhat correct, there are many situations where the invisible hand fails to move; or even if it does, it does not deal a fair hand. After the ugly market crash in 2008, brought about by the captains of capitalism, there need not be any doubt about it. But if you are still a believer in market economics, this book would be a scholarly antidote. However, as you can guess, Dr Basu’s arguments are not new—not as refreshing as Raghuram Rajan’s original idea that capitalism is rarely given a fair chance by corrupt and self-serving businessmen, politicians and officials.
In any case, what use is all this scholarship in real life ? For instance, while arguing against the theory of the Invisible Hand, Dr Basu points out how one-sided contracts can deprive large swathes of humanity of the gains of capitalism. Well, Dr Basu is now an economic advisor to the government of India, a government that is possibly the most corrupt ever. He has a ringside view of it. The 2G scam is a template of how capitalism is easily undermined by power and greed. Besides, the tens of thousand crores of giveaways under social schemes are another example of how not to help the poor. All this is happening right under Dr Basu’s nose. One wonders what influence he has. If he does not, what role is he serving in Delhi? Collecting material for another scholarly book? Is that too different from the self-interest of a much-maligned investment banker?