“Proper medical facilities are available to all prisoners in case of necessity and this ground cannot be pressed now when as good facilities as are available outside are available to an undertrial in the jail itself,” the court said
New Delhi: A special court on Monday dismissed the anticipatory bail plea of Cineyug Films director Karim Morani, an accused in the second generation (2G) spectrum allocation case, reports PTI.
Special Central Bureau of Investigation (CBI) judge, in the Delhi court, OP Saini dismissed Mr Morani's plea seeking anticipatory bail on health grounds, saying his medical condition is “normal and stable”.
The court has now directed Mr Morani to appear before it Tuesday.
“In view of the medical condition of the accused (Mr Morani) being normal and stable, I am satisfied that no case for anticipatory bail on medical ground is made out. The application is without merit and the same is dismissed,” the court said.
Senior advocate Siddharth Luthra, appearing for Mr Morani had submitted before the court that the medical condition of Mr Morani is not such that he should be placed under custody as he may not be able to bear the stressful environment of being placed in custody.
“I may also add that in case of need, proper medical facilities are available in Tihar Jail itself and if an undertrial/prisoner requires any further treatment, he is immediately taken to Ram Manohar Lohia (RML) hospital or All India Institute of Medical Sciences (AIIMS), as per the requirement of the situation...
“So proper medical facilities are available to all prisoners in case of necessity and this ground cannot be pressed now when as good facilities as are available outside are available to an undertrial in the jail itself,” the court said.
CBI, India’s premier investigation agency, in its second charge-sheet in the 2G case, had alleged that Swan Telecom and Dynamix Realty promoters Shahid Usman Balwa and Vinod Goenka channelled Rs200 crore to Dravida Munnettra Kazhagam (DMK) family-run Kalaignar TV, through Kusegaon Fruits and Vegetables Pvt Ltd and Morani’s Cineyug Films Pvt Ltd.
DMK MP Kanimozhi and Kalaignar TV MD Sharad Kumar, accused in the 2G scam, are already in judicial custody after the court denied bail to them on 20th May.
Mr Luthra, while pressing for Mr Morani’s bail, had said that conspiracy was like a train and Mr Morani was just like a ‘chaiwala’ (tea vendor) who hops on to the train and hops off after carrying out his work without any idea of where the train is going and has nothing to do with it.
Countering the submissions, special public prosecutor UU Lalit had said that these are not innocent transactions of a ‘chaiwala’ who hops on to a train.
He had argued that Mr Morani was handling the finances of Cineyug when the “illegal gratification” of Rs200 crore was routed to Kalaignar TV through it.
Submitting that these were back-to-back transactions which by no means were a commercial act on the part of Cineyug, Mr Lalit had said that on 24 December 2009, Rs10 crore moved from Kusegaon Fruits to Cineyug to Kalaignar. Likewise, Rs100 crore reached KTV on 15 July 2009.
Mr Lalit had said that on merits, the man (Mr Morani), who was a conduit, is not entitled to anything.
Mr Luthra had submitted a verification report of Mr Morani’s medical records issued by the JJ Hospital in Mumbai, in the western Indian state of Maharashtra, in pursuant to the court’s earlier direction.
The Department of Cardiology and Neurology of JJ Hospital report stated that his vitals were normal and he was advised to undergo follow-up checks as an outpatient.
The CBI had not opposed his plea on medical grounds but refuted his arguments that the money moved by him into Kalaignar TV was a purely commercial transaction and that he did not know that the same was meant for nefarious designs.
During the quarter, the company incurred an expenditure of Rs571.50 crore related to restructuring, forensic investigation and litigation support, class action settlement consideration and provisioning for impairment losses in subsidiaries
Hyderabad: IT services major Mahindra Satyam has posted a consolidated net loss of Rs327 crore for the quarter ended 31 March 2011, on account of exceptional expenditure, including payments made to settle the Securities and Exchange Commission (SEC) and Upaid lawsuits in the US, reports PTI.
“Q4 is another quarter that demonstrated continuing progress on growth, operational efficiencies, high delivery standards and investments to capability building,” Mahindra Satyam chairman, Mr Vineet Nayyar, said.
Income from operations stood at Rs1,375.30 crore during the January-March quarter of 2011.
“The Company Law Board (CLB), vide its order dated 30 June 2010, and 6 July 2010, has exempted the company from publication of financial results for the quarter ended from 31 December 2008, to 31 March 2010. As such, the corresponding quarterly figures for the previous year are not provided,” Mahindra Satyam said in a filing to the Bombay Stock Exchange (BSE).
During the quarter, the company incurred an expenditure of Rs571.50 crore related to restructuring, forensic investigation and litigation support, class action settlement consideration and provisioning for impairment losses in subsidiaries.
“This year has been a very satisfying one, given the impressive progress we made on various fronts, such as minimising the legal overheads, fortifying governance mechanisms and restoring customer and employee confidence,” Mr Nayyar added.
For the full year ended 31 March 2011, the company’s consolidated net loss widened to Rs147.30 crore from Rs124.60 crore in the same period last year.
Income from operations declined to Rs5,145 crore during the January-March period from Rs5,481 crore in the same year-ago period.
In connection with the lawsuit filed by Upaid, the company deposited $70 million (nearly Rs327.4 crore) during FY09-10 into an escrow account pursuant to a settlement agreement with the company.
With respect to provisioning against taxation, the company is carrying a total amount of Rs380.30 crore (Rs368.60 as of 31 March 2010).
The company has also agreed to make a payment of $10 million (Rs46.70 crore) to the US SEC under a settlement agreement related to the accounting fraud perpetrated at the firm by its founder and former managing director B Ramalinga Raju.
On a standalone basis, the company has reported a net loss of Rs325.90 crore during the fourth quarter of FY10-11, while income from operations stood at Rs1,277.70 crore during the period.
For the full year, the company posted a net loss of Rs127.60 crore against Rs71.20 crore in the previous year.
Income from operations also declined to Rs4,776.10 crore during the year ended 31 March 2011, from Rs5,100.50 crore in the same period last year.
Meanwhile, shares of Mahindra Satyam were trading at Rs73.85 apiece in noon trade on the BSE, down 3.78% from their previous close.
Renationalisation is about bureaucratic ambitions and greed; often political ambitions are also involved
I was doing research for my new book and I came across the following quotation. The article was written for The Economist in 2007, but the sentiment is quite common. According to The Economist, “The world is experiencing one of the biggest revolutions in history, as economic power shifts from the developed world to China and other emerging giants. Thanks to market reforms, emerging economies are growing much faster than developed ones.” Precisely! The quote is accurate in that it attributes the rise of emerging economies to market reforms. Where the premise fails is the assumption that these reforms are permanent. They aren’t. These reforms are only laws and like any laws they can be rewritten.
A pretext to get rid of market reforms was the recession, or as it is becoming known, the ‘Lesser Depression’. The consensus for governments in both emerging and developed markets is that capitalism has somehow failed and that with more government intervention in the markets economies can be revived. But the Lesser Depression was not the beginning. It only helped accelerate a process that had started much earlier. The process involved a major assault on markets through an insidious process of renationalisation.
In the good old days a government who wished to nationalise a company simply did so by decree. The most recent example was when Bolivia’s President Evo Morales chose 1 May 2006 to lead troops into his country’s biggest natural gas field and read out a decree that gave Bolivia control. The glitch was that the owner of the gas was not some evil multinational corporation, but the state of Brazil through its state-owned gas company Petrobras.
But Bolivia is the exception. These days, governments understand that an outright nationalisation is bad for business and especially foreign investment. So they have developed more subtle methods. For example, the takeover of Yukos and the jailing of its owner, Mikhail Khodorkovsky, by the state through a charge of tax evasion helped to increase the state’s share of the Russian stock market capitalisation from 24% in 2004 to 40% in 2007.
The Lesser Depression provided an excuse for governments in emerging markets to provide money and liquidity to favoured state firms while strangling private and foreign firms. In Russia, the state-owned banks, Sberbank and VTB, received enough new capital to be able to capture more than 50% of Russia’s retail and corporate banking market. Foreign firms cannot compete because the Russian state banks can lend on terms which would not get past credit committees in western institutions. If the money is not lent, it is used for acquisitions like the recent acquisitions of Bank of Moscow and TransCreditBank by VTB.
Buying the competition with state money is also popular in China. In 2009, when private companies were reeling from the economic downturn, the provincial government of Shandong used its control of Shandong Iron and Steel Group, the world’s ninth-largest steelmaker by capacity, to attempt a take over the largest non-state steel groups Rizhao Iron and Steel. Rizhao’s owner, Du Shuanghua, was not happy about the prospect.
To try to prevent the merger, he tried a very Chinese poison pill. He handed up to 30% of Rizhao’s shares at a low valuation to Kai Yuan Holdings, a Hong Kong-listed company which is controlled by close relatives of Hu Jintao, Chinese president. It didn’t work. Protecting Du would have been too politically risky for Hu, so the merger went through.
Renationalisation is not necessarily a product of bureaucratic ambitions or greed. Often, political considerations are involved. Huang Guangyu, founder of Gome electronics retailer, was once China’s richest man. Like Khodorkovsky, he was seen by China’s leaders as a potential threat to their power, so he was arrested in 2008.
The Chinese sovereign wealth fund also played a part in the renationalisation process known in Chinese as “guojinmintui” or “the state advances as the private sector recedes”. State-owned banks have to raise capital to cover an ever-increasing amount of bad loans caused by the real estate bubble. In stepped China Investment Corporation, one of the country’s many sovereign-wealth funds, and purchased shares of Chinese banks.
It is not just emerging markets. Developed countries have set up sovereign wealth funds to help out local industries. The French created the Fund for Strategic Investment and the British set up Strategic Investment Fund; both were created to steer state money to particular industries and companies.
Any reform, especially a market reform, is very difficult for the reason that it threatens powerful economic and political interests. The difficult market reforms in the 1990s in China, India and Russia were achieved at great cost and suffering. They were undertaken basically because there were few alternatives. But the assumption that these reforms and the growth they engendered are permanent is simply false.
(This is the second article of a two-part commentary on the reversal of reforms in emerging economies. The first article, ‘Why state ownership of enterprises will not go away’ was published on 16 May 2011. The writer is president of Emerging Market Strategies and can be contacted at [email protected] or [email protected].)