2G: SC issues notice to CBI on bail pleas of Chandolia, Behura

The Supreme Court on Monday agreed to hear the bail petitions of A Raja’s former private secretary RK Chandolia and former telecom secretary Siddharth Behura, accused in the second generation (2G) spectrum case, and issued a notice to the CBI on their pleas

New Delhi: The Supreme Court on Monday agreed to hear the bail petitions of A Raja’s former private secretary RK Chandolia and former telecom secretary Siddharth Behura, accused in the second generation (2G) spectrum case, and issued a notice to the Central Bureau of Investigation (CBI) on their pleas, reports PTI.

A bench headed by justice GS Singhvi also extended the interim stay on the Delhi High Court’s order which had put on hold the bail granted to Mr Chandolia by the trial court.

With Monday’s order Mr Chandolia, who was granted bail by the trial court, will remain out of jail till the next date of hearing.

Out of the 14 accused persons, 12 have already been granted bail and only the prime accused, former telecom minister A Raja and Mr Behura are left behind the bars.

The bench had agreed to examine Mr Chandolia’s plea against the high court’s suo motu decision to stay the grant of bail to him by the special court on 1 December 2011 and was released from Tihar Jail the same day.

Mr Chandolia had moved the apex court, challenging the high court order saying its decision of staying the bail was “unwarranted and erroneous”.

Mr Behura had approached the apex court challenging the 16 December 2011 order of the high court denying him bail on the ground that he was the ‘perpetrator’ of the illegal design of Mr Raja and cannot claim benefit of parity with 10 others released on bail.

The high court bench of justice VK Shali had taken suo motu cognisance of news reports on grant of bail to Mr Chandolia and suspended it, saying the stay would be operative if he was not already out of jail.

The high court had said Mr Chandolia’s release would have an ‘impact’ on Mr Behura’s bail plea, on which the verdict was reserved. Later on, Mr Behura was denied bail by the high court.

The apex court had on 7 December 2011 put on hold the high court’s suo moto decision of staying grant of bail to Mr Chandolia.

Denying bail to Mr Behura, who was arrested along with Mr Raja on 2nd February last year, the high court had said, “One thing, which emerges from their (witnesses) statements, is very clear that the petitioner (Mr Behura) has been a perpetrator of illegal design of Mr Raja and, therefore, his role was distinguishable from 10 accused who have been granted bail and were beneficiary of that illegal act.”

It had said Mr Behura cannot claim benefit of parity with others “merely without any application of mind by the court” as he being a public servant was required to act differently.

The nature of evidence against Mr Behura was “very serious” and if offences were proved, it would entail life term under section 409 (criminal breach of trust) of the Indian Penal Code (IPC), it had said.

The high court had said that if Mr Raja can be said as the kingpin of the case then Mr Behura and Mr Chandolia (ex-aide of Mr Raja) acted as a ‘propeller’ in committing the offence.

It had also said that public servants Mr Raja, Mr Behura and Mr Chandolia conspired and acted to grant benefits to telecom companies.

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Predictions—don’t bet on them

The mistakes in forecasts do seem to follow a pattern. They all find rationalizations for a continuation of what has gone before and attempt to repeat it. Not the best idea

It is often traditional for commentators at the end of the year to make predictions about the coming year. Since I was not born with the gift of prophecy and cannot see the future, I started a new tradition. Rather than make predictions myself, I reviewed the predictions of others throughout the year. Fortunately these are quite plentiful. Over the course of the year I have collected them and compared them with the real results. What is truly interesting to me is that anyone bothers to pay people for these forecasts.

Let us start with commodities, specifically the all time favourite gold. The good people at Capital Economics predicted that gold would reach a new high of $2,500 no later than 2013. Although that is pushing the envelope in terms of time their reasoning was sound. They based their prediction on the assumption that “doubts over the survival of the euro [would] come to a head.” The euro is certainly in doubt and gold did make a run at $2,000 with an annual high of $1,900, but since then it has declined 15% to $1,600 despite continual questions about the euro. So the momentum behind the yellow metal might have finally dissipated.

Another favourite commodity was copper. Barclays Capital predicted that Dr Copper would have an average price of about $9,550 in 2011about the price it started the year. Goldman Sachs was even more optimistic. They predicted a rise in 2011to $11,000 within 12 months a 15% rise. The assumption was logical. Continued recovery in the US and Europe and booming Chinese demand. But there was a flaw. Copper was almost at an all-time high. Nothing stays up forever. Copper did not rise 15% or even stay the same. It declined 20% to $7,500.

Oil is always a popular commodity to predict. Thanks to US and Chinese monetary stimulus it rose from an average of $80 in 2010 to a high of $114 in 2011. However it did not live up to Goldman Sachs’ expectations. They predicted that it would average $110 a barrel. They were only off by 20%. It only averaged $87 a barrel.

Emerging markets were heavily hyped. In 2010 investors ploughed a record $86 billion into emerging market funds. The rational was that “strong economic and micro fundamentals in emerging markets, and fairly steady returns” would equal rising markets. They didn’t. The MSCI Emerging Markets Index fell 20% over the year. The glaring flaw in the argument again was valuations. If the markets poured a record amount into emerging markets in 2010, it is a conspicuous signal that the feat probably would not be repeated. The markets of Chile, Peru, Indonesia, the Philippines, Sri Lanka, Taiwan, and Thailand all reached all-time highs in 2011. There was not where to go but down.

The common denominator to commodities and emerging markets is China. As the world’s second largest economy it has an enormous impact on the world economy. All forecasts are based on assumptions and most assumptions are based on recent history. The Chinese economy has grown by leaps and bounds over the past 10 years, so the logical assumption is that it would continue. At least that’s what two famous money managers thought. Mark Mobius, executive chairman of Templeton Emerging Marketing Group, and Jing Ulrich, chairperson of China equities and commodities at JPMorgan Chase & Co, both forecast that China’s stocks were set for a rebound, because the government could keep inflation under control.

Of course keeping inflation under control is a tall order if you have spent two years emptying your banks to flood your economy with stimulus. In the end, the Chinese government was just about as helpless as other governments and the Shanghai market ended the year at a level not seen since March 2009.

But my all time favourite prediction for the year was an American stock, Netflix. Netflix was supposed to have a paradigm busting business model and no competitors. Of course it wasn’t true. They rent movies and they had lots of competition. Still Goldman Sachs recommended the stock in March when it was at 200. It did go to 300 by 14th July and my forecast for a crash on 31st July was very accurate. It dropped 76% since last summer.

Most disappointed investors blamed Netflix CEO Reed Hasting who certainly made some massive blunders, but the real mistakes were made by the people who recommended the stock and the people who followed their advice. Business models can be hard to analyze and decisions unknown, but all time high prices are something that are screamingly obvious and should be avoided at all costs. 

The mistakes in these forecasts do seem to follow a pattern. They all find rationalizations for a continuation of what has gone before and attempt to repeat it. Not the best idea.

(The writer is president of Emerging Market Strategies and can be contacted at william@emergingmarketstrategies.com or w.gamble@alrroya.com).

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COMMENTS

Govind Shanbhag

5 years ago

Money Life - This is too good article and should be eye opener to those who blindly follow such predictions. Are these so called experts not accountable at least morally. Please keep it up for enlightening us.

Budget to be presented after state polls: FM

The announcement of the assembly election schedule in five states between 30th January and 3rd March has raised the possibility of rescheduling of the Budget for 2012-13 this year

New Delhi: The Union Budget will be presented after the completion of elections in five states, but the government has not yet decided the final date of presentation, reports PTI quoting finance minister Pranab Mukherjee.

“We have not yet decided the time (for the Budget), but naturally it will be after the elections,” Mr Mukherjee told reporters here.

He was replying to a query on the likely date for presentation of the Budget.

The announcement of the assembly election schedule in five states between 30th January and 3rd March has raised the possibility of rescheduling of the Budget for 2012-13 this year.

As per the schedule worked out by the Election Commission, last polling will take place on 3rd March in Goa and counting of votes will begin on 4th March.

The general budget is usually presented on the last day of February every year.

Mr Mukherjee will hold brainstorming sessions with various stakeholders during his annual pre-budget meetings beginning 11th January.

The first meeting would be held with agriculturalists, followed by a series of interactions with sectoral experts, representatives, industry captains and economists over the next ten days to get their feedback and inputs for incorporating them in Budget 2012-13.

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