China says billions missing from public funds

After a nationwide audit, a national auditor has said that Chinese officials stole or misused a staggering $34.40 billion this year

State company czars and other top officials in China have been found to have indulged in luxuries like buying fancy cars and other consumer durables at state expense, reports PTI.

The country's national auditor is saying that officials stole or misused a staggering $34.40 billion this year after a nationwide audit was conducted, official news agency Xinhua reported.

But now the authorities are coming down hard on corruption. Over 1,068 people including government officials have been handed over to disciplinary or judicial authorities for their roles in the missing funds, the agency said.

"Embezzlement, waste of money and false fiscal reporting still existed in central departments, despite some improvements," Xinhua quoted Liu Jiayi, the country's chief auditor, as saying at a conference.

With such a huge amount going missing from public funds, an alarmed prime minister Wen Jiabao told auditors to crack down hard on embezzlers.

Misconduct included unauthorised purchase of cars and other consumer durables by government officials and agencies, Liu said at the conference.

He said investigators recovered 16.3 billion yuan ($2.4 billion) following the audit which covered 99,000 companies, government agencies and public institutions across the nation.

The auditor said, "We should enhance awareness among officials of the stiff anti-embezzlement laws and set up a clear accountability system."

China announced its firm resolve last year to crack down hard on corruption as it launched a 4 trillion yuan stimulus package to halt a sharp drop in exports.
 

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Tiger Woods’ sponsors lose $5billion-$12 billion in just 13 days

Stocks of the sponsors of golf superstar Tiger Woods have lost $5billion-$12billion in market capitalisation since reports of his alleged extramarital affairs have surfaced

Sponsors of golf superstar Tiger Woods have lost around $5 billion-$12 billion since reports of his extramarital affairs broke out, reports PTI.

According to a new survey conducted by the University of California, Davis (UC Davis) studied the stock market returns for the 13 trading days that fell between 27th November, the date of Mr Woods' car crash and 17th December, a week after the sports champion announced his indefinite hiatus from golf.

“Total shareholder losses may exceed several decades' worth of Tiger Woods' personal endorsement income," said professor Victor Stango, noting that these are separate and much larger than the golfer's own earnings, who before the scandal got about $100 million a year in endorsement income, more than any other athlete.

Two UC Davis economics professors, Victor Stango and Christopher Knittel, analysed eight of his sponsors —Accenture, AT&T, Tiger Woods PGA Tour Golf (Electronic Arts), Gillette (Proctor & Gamble), Nike, Gatorade (PepsiCo), TLC Laser Eye Centers and Golf Digest (Conde Nast).

"(This) pattern of losses is unlikely to stem from ordinary day-to-day variation in their stock prices," the researchers said, based on conclusions that the scandal reduced shareholder value in the sponsor companies by 2.3%, or about $12 billion.

The study also finds that three sports-related companies —PGA Tour Golf, Gatorade, and Nike—have been worst hit, experiencing a 4.3% drop in stock value, equivalent to about $6 billion.

"Our findings speak to a larger question of general interest in the business and academic communities: Does celebrity sponsorship have any impact on a firm's bottom line?" professor Stango said.

"Our analysis makes it clear that while having a celebrity of Tiger Woods' stature as an endorser has undeniable upside, the downside risk is substantial too," he added.

The scandal surfaced following an accident on 27th November when Mr Woods crashed his sports utility vehicle (SUV) outside his Florida mansion, sustaining minor injuries. His wife Elin Nordegren had to use a golf club to break the back window of the SUV to rescue him.

The accident may have occurred following a fight with Ms Nordegren accusing her husband of having an extramarital affair. Since then, ten women have claimed to have been involved with Mr Woods, out of which eight have been named.

Since the day of the accident, Mr Woods has not been seen in public and US tabloids are reporting that this may be due to cosmetic surgery to repair a broken tooth following a fight with his wife who allegedly chanced upon a text message from one of the women with whom he was having an affair.

The only contact the international golf legend has made with the public is to post an apology on his website and ask the media to leave him alone.
 

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Ambani gas row dominates Supreme Court proceedings in 2009

During the year, the high-voltage legal battle between the Ambani brothers over the gas dispute dominated the proceedings in the Supreme Court

The year 2009 saw a high-voltage legal battle between the Ambani brothers over the gas dispute reaching the Supreme Court, with a judge withdrawing from the Bench, reports PTI.

The apex court also heard a plea for bringing back black money stashed in tax havens abroad.

Top lawyers were engaged by both Mukesh Ambani group company Reliance Industries Ltd (RIL) and Anil Ambani-led Reliance Natural Resources Ltd (RNRL) over the dispute relating to the supply and pricing of gas from the KG Basin.

The 26-day marathon hearing was not free from controversy as a senior judge recused himself after six days of hearing. Justice RV Raveendran, who agreed to hear the matter after declaring that he held equal shares in both companies, withdrew himself from the Bench on the ground that his daughter was working in a law firm which was advising one of the entities in global projects.

The legal fight between the Ambanis saw the government in a piquant situation when RNRL accused the government of siding with RIL. The government also stepped in to defend State-run power producer NTPC Ltd, which according to the agreement with RIL, will get gas at $2.34 per unit. RNRL is seeking gas at the same rate.

The judgement in the Ambani gas row by a Bench headed by Chief Justice KG Balakrishnan has been reserved.

The issue of black money stashed in foreign banks was brought before the apex court by eminent jurist Ram Jethmalani and some bureaucrats and academicians, just before the Lok Sabha elections.

A Bench headed by the Chief Justice sought explanation from the Indian government which after much dilly-dallying filed an affidavit about the steps taken by it.

The affidavit was termed as “eyewash” by the petitioners even as the government said that the enforcement directorate had already initiated proceedings against Pune-based businessman Hasan Ali Khan under the Money Laundering Act.

The matter relating to land acquisition for Special Economic Zones (SEZs) also figured in the Supreme Court.

The apex court dismissed the plea for staying the land-acquisition process for a Mukesh Ambani-promoted project in Raigarh in Maharashtra. The land-acquisition process had hit a roadblock after farmers in 22 villages opposed it in a referendum initiated by the State government last year.

The land acquisition for the SEZ, which was to come up in an area of 10,000 hectares at an investment of Rs40,000 crore, was to be completed within two years since it was given clearance in June 2005 and two extensions were subsequently granted.

The conflict of interest in hearing corporate matters came to the forefront this year in the apex court with judges forced to recuse themselves. The worst came when Justice SH Kapadia, who is next in line to be the Chief Justice of India, was accused by an advocate in an interview to a news magazine of hearing the matters of a company in which he held shares.

Justice Kapadia, who was in a Special Forest Bench, was accused of hearing the mining matter of Vedanta-Sterlite. The controversy did not end as the apex court has initiated contempt proceedings against advocate Prashant Bhushan for his alleged comments.

Later, Justice Kapadia also withdrew from the Bench hearing a matter pertaining to the public offer made by London-based Vedanta Resources to buy additional stake in iron ore exporting firm Sesa Goa as he happens to be shareholder of a sister company.

Justice Markandey Katju also realised that conflict of interest was coming in the way of his deciding the dispute between RIL and BPCL, the verdict of which he had reserved after hearing the matter for two years. The grounds cited by Justice Katju to recuse himself was that his wife held shares in RIL.

Telecom disputes particularly relating to spectrum allocation also figured in the apex court with the department of telecom rushing with an appeal against the Delhi High Court decision quashing its government order advancing the cut-off date for allocation of 2G spectrum.

Corporate crime and corruption also consumed the time of the apex court with the year commencing with matters relating to the Satyam fraud by its chief Ramalinga Raju.

While the Satyam founder was in custody, a plea by market regulator Securities and Exchange Board of India (SEBI) was allowed, to interrogate him in prison in connection with the Rs7,800 crore scam.

The apex court also rejected the plea of financial industry magnate Nimesh N Kampani seeking quashing of criminal proceedings initiated against him by the Andhra Pradesh government in the Nagarjuna Finance scam case.

Among government matters, the income-tax department had a tough time in the apex court to explain its stand of allowing actor Amitabh Bachchan to withdraw his security expense claim amounting to around Rs6.90 crore, the actor's income from popular TV game show 'Kaun Banega Crorepati' (KBC) in 2001-02.

Union civil aviation minister Praful Patel received a setback when the apex court refused to stop criminal proceedings against him in a Rs40 crore fraud case involving a company once chaired by him.

Among environmental matters, the apex court came down heavily on the bleaching and dyeing industry in Tirupur for releasing untreated effluents into the Noyyal river.

The Reddy brothers of Karnataka got a jolt from the Supreme Court when at the fag end of the year it banned mining activity at the Anantpur village in Andhra Pradesh. However, before this incident, the mining activities in Aravali hills in Haryana were totally stopped.
 

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