“The slower-than-expected growth this year could be attributed to global slowdown, which has resulted in slowing down of growth rate in many countries, including India, as well as to tight monetary policy to control inflation,” minister of state for finance Namo Narain Meena informed Parliament
New Delhi: Attributing the slowdown to the Reserve Bank of India’s (RBI) tight monetary policy and global problems, the government today informed Parliament that economic growth in 2011-12 will moderate to 7.5%, from 8.5% in the previous fiscal, reports PTI.
“The slower-than-expected growth this year could be attributed to global slowdown, which has resulted in slowing down of growth rate in many countries, including India, as well as to tight monetary policy to control inflation,” minister of state for finance Namo Narain Meena said in a written reply in the Rajya Sabha.
Although the Economic Survey in February had expected a growth rate of 9% for the current fiscal, the Mid-Year Analysis 2011-12 tabled in Parliament recently lowered the growth projection to 7.5%, he said.
“While the economy is expected to slow down in the current year from the levels achieved in 2010-11, India is still among the global frontrunners in terms of growth of gross domestic product (GDP),” Mr Meena said.
The government has been pursuing prudent macro-economic policies on an ongoing basis to obviate the impact of global financial crisis, he said, adding that the efforts were also being made to strengthen financial markets and increase social spending to protect poor.
The specific measures taken by the government recently to promote growth include “creation of Infrastructure Debt Fund, focusing on public private partnerships, announcement of New Manufacturing Policy, announcement of Draft Telecom Policy, introduction of Land Acquisition Bill in Parliament, and a number of legislative measures to develop banking sector in India”, he added.
Mr Meena said the Indian economy grew at an average annual rate of more than 9% between 2005-06 and 2007-08. The growth rate fell to 6.8% in 2008-09 on account of global financial crisis, but recovered the momentum to 8% in 2009-10.
“Even during 2011-12, which has been a relatively difficult year with the growth rate slowing down to 7.3% in the first half (April-September), India is still among the global front runners,” Mr Meena said.
Typosquatters register misspellings of popular websites in the hope that they will be able to make money out of traffic from unintentional typing mistakes made by internet surfers
In case you are one of the people who prefer to type a complete URL while surfing the Internet, here is a warning from IT security and control firm Sophos. It says one needs to be very careful while typing URLs otherwise you may be led to typosquatting websites like adult sites or phishing sites. Typosquatters register misspellings of popular websites in the hope that they will be able to make money out of traffic from unintentional typing mistakes made by internet surfers, the report added.
“It's so easy to mistype a URL, and it’s inevitable that from time to time you will end up on an unintended website. In the worst cases, careless typing can lead you to a criminal website designed to steal your identity or phish your credentials. A good idea is to bookmark your favourite websites rather than rely upon your fingers working correct,” said Graham Cluley, senior technology consultant at Sophos.
According to a study conducted by Sophos, there is a significant typosquatting ecosystem around high-profile, often-typed domain names. A huge 86% of the possible one letter misspellings of the Apple homepage led to typosquatting sites.
Sophos said it looked at typosquatting targeting its own website and those of Facebook, Google, Twitter, Microsoft and Apple. The study looked for registered websites for every single one letter typo of the company name: one letter omitted (e.g. Sopos), one letter mistyped (e.g. Sphos), or one letter added (Ssophos).
Of the 14,495 misspelled URLs looked at in the study, 738 or 5.1% were categorized by Sophos as cybercrime or adult. The former should always be blocked; the latter should be blocked at least in the workplace or around children, the security firm said.
The highest proportion of the squatting sites, 15% led to advertising sites. Cybercriminals will register misspelled sites to make advertising revenue every time someone mistypes the name of a popular site. Around 12% were found to be IT & hosting pages—suggesting that they have been registered with the intention of being held onto and sold at a profit, which is also known as ‘domain parking’, the report said.
Another important factor that makes people to type the URLs, is security concern related with clicking on a link, which is good thing. In addition majority of people even try to type the http or www and .com besides the URL. This can be avoided by using a shortcut. One should type the URL (like Google) and then press ‘control+enter’ buttons. This automatically adds the required http, www and .com in the URL.
Thanks to lax laws on the subject of deeper enquiry on who or what is really behind a company, the business of khoka and shell companies have brought India to a point where we already do not know who or what is behind major projects. We do know, however, that large amounts of money flow in and out in this way, changing colour and provenance at every step
There was always a trend of using “khoka dabbas” (shell companies) when heading for most sub-contracted work in India, and for that matter, in the rest of the world too. Whether they were front companies for the decision makers or simply ways and means to evade taxes or disguise real ownership or reduce liabilities on the main company brand or simple swindles or anything else including espionage—shell companies have been a fact of life for as long as one remembers—and beyond.
Even the company banias, traditionally following invading armies across the country, and doing the same now for home-grown fauj, were often cover shell companies for the bigger brass, as anybody who wore a uniform would tell you. This tradition followed the expansion of civil rulers and governance over the sub-continent and beyond, with a fantastic working method which involved not just buying prime property wherever they moved next, but also locking in with generations of people who would continue to rule regardless of the form of governance—foreign rulers, royal monarchies, dictatorships or the more recent democracies—shells ruled the roost quietly and steadily.
In Anglo-Saxon literature, the most famous shell company had to be the one made famous by Ian Fleming in his James Bond series—Universal Exports. There are speculations that Universal Exports as utilised by the British Secret Service or MI6/MI7, was a modern name for the more infamous East India Company, and based on the Anglo-Saxon interpretation of what the world was supposed to be like where the colonials and subsequent allies could do no wrong. Likewise, modern real history is not complete without shell companies being used for everything under the sun—from owning ships to floating airlines to operating banks and selling or making arms—the list is endless.
It is not as though being or using a “shell company” was unknown in modern post-independence India either. As a simple matter of fact, joint-venture shell companies were facts of life too, and stranger were the partnerships involved—Marathon Aviation Company of Miami, Florida, for example, in context with the infamous U2 flight piloted by Francis Gary Powers over the USSR that was brought down by the Soviets took off from an airbase in Peshawar, but also had links through The Farm to the ‘secret’ airbase outside Cuttack in Orissa known then as “Oak Tree”.
Put it this way—hardly any form of trade takes place, global or domestic, without the involvement of shell companies at some stage or the other. It is just that, of late, much of trade as we know it also involves sheer simple loot, since the shell companies have grown even bigger and better in recent times. As Disraeli said to the effect in his book ‘Sybil’, traders stride across the world, with a new name to suit a new purpose, their pockets full of gold and silver earned through the opium trade, shouting and demanding transparency, free trade and an end to corruption in the next country they wish to strike and empty out.
After all, if, as per modest estimates, the narcotics economy of the world is equal to or more than the oil and the transportation economies of the world put together, then that’s a LOT of shell companies moving a LOT of the assets and proceeds around so that the trails go cold and the wheels of commerce keep turning, and there is some truth in the fact that certain industries like the gaming industry and the transportation industry are major players in this. Likewise, there is no dearth of what is known as “suitcase banks”, which exist solely for the purpose of facilitating international commerce—performing whatever duties are required of them to transact, transport or convert money.
(I should know. As the managing director of a software company that started out with working in core technologies towards facial biometrics, we got sucked inexorably into technology for the banking business, till we realised what was really going on in the world out there, and had to make our choices. Today, it can confidently be said that none of the much adored votaries of good corporate governance in any field whatsoever can truly claim exemption from being intricately involved in shell companies as well as clearing house for conversion of the illicit proceeds of the narcotics trade into what is known as free trade based clean economies or whatever the free trade exponents are calling it nowadays.)
However, within the Indian context, it was always the assumption that shell companies were more a bane of existence in the smaller segment of business—contracts for municipal works and similar. The moment a corporate in India acquired some form of perceived legitimacy by building an image or sticking a series of ‘Limited’ kind of suffixes to its name; it was assumed that by some magic, the concept of shell companies did not apply to them. Likewise, there is this amazing assumption that any and every “foreign” company is as pure as the driven snow and is to be trusted blindly as an honoured guest, regardless of actual auspices.
With the advent of large dollops of liberalisation, privatisation, economic growth and other such symbols of development, then, came the almost endemic spread of larger and ostensibly clean squeaky clean shell companies. The number of large projects in India went through the roof, and exponentially, along with them, so did the shell companies. In many cases, it didn't help much that the companies or government agencies handling the projects themselves appeared to encourage this approach—thereby diluting the concept of downstream accountability as well as bringing in the growth of the “non-performing asset” industry in India, along with the full list already subscribed to, listed before.
As a matter of interest, an RTI (Right to Information) application to the Unique Identification Authority of India (UIDAI) asking for details and information on just the country of origin of their vendors brought forth, with real difficulty and after large dollops of follow-up, an amazing set of responses which briefly meant—“we don't know”. They didn’t know who the people were behind the companies, they didn’t know where the trail between local office and parent company went cold and most of all, the “KYC” (Know Your Customer) in the case of their vendors was much weaker than the KYC required of savings bank account aspirants—or even the details required from UIDAI Aadhaar aspirants! Which left me shell shocked by that response, pertaining to the most important currency a country can possess, details of its own people, but then, that’s the reality anywhere.
Some specific examples, randomly selected from the masses of information now available thanks to the Right to Information Act as well as the even larger amount of information (also thanks to the RTI Act) on the Reserve Bank of India (RBI) and CIBIL websites, will show what these shell companies really manage to do, either by hoodwinking the project operators in India, or simply in collusion with them.
# The GFRG (Glass Fibre Re-inforced Gypsum) installation contract for Terminal 2 at Chhattrapati Shivaji International Airport, Mumbai is valued at about Rs52 crore, plus taxes. The contract was reportedly awarded to Shamel Projects India Pvt Ltd, a company incorporated only in December 2009. The company has been incorporated by two individuals. The authorized capital of the company is said to be Rs25 lakh and the paid up capital of the company is only Rs21 lakh. The company has minimal money in their known bank account. Nor has it any bank limits to take up a project of this size. The company has absolutely no infrastructure or any machinery in India to execute this contract. The company has not even one employee.
Shamel in India also reportedly has no previous business track record—it has not executed a single project or undertaken any work previously. There is no material available to demonstrate what previous works have been executed by this company, what capacity it has to execute a project of this size and its ability to deliver high quality works within a stringent time frame, as required in a large public works project.
There is a company by the name “Shamel International Industries Trading & Contracting LLC” incorporated in Oman which undertakes interior design and associated works. However, this company is not a known shareholder or stakeholder in Shamel Projects India Pvt Ltd. Shamel International has not invested in Shamel Projects India Pvt Ltd and is no relationship between these two entities. Likewise, Shamel-Oman appears to have another tie-up with a company of the same name in UAE-Sharjah.
As per the contract awarded by MIAL, designs were to be completed, submitted and approved by 30 July 2011, support systems for GFRG installation were to be installed from 15th September onwards and installation of GFRG works was to begin from 1 October 2011 onwards. However, as on date no work has commenced. The company was supposed to give a performance guarantee for the timely and proper completion of the contract against the award of the contract, which has still not been given by the company. The authorities, now, do not know who to turn to because the company appears to be a—khoka.
# The Unique Identification Authority of India (UIDAI) has been much in the news lately for having gone through more than a few hundred crores in the last few years for its AADHAR project. As on date, the output per annum on what is most certainly an outdated technology using fingerprint biometrics which is a very debateable choice, is less than the number of infants born annually. The list of vendors involved makes for fascinating reading—what, for example, does one make of a major vendor called “L-1”, the terms for “lowest bidder number one”, on which nothing much that is cogent is known anywhere in the world?
Likewise, another apparent shell company calling itself “Idmission” (http://www.idmission.com) claims to on its website be a part of the UIDAI, and also puts out vague claims to being somehow linked to both UIDAI as well as to banks in India, linking the AADHAR concept to banks, but obviously without any concurrent information on the same from either UIDAI and RBI. A little bit of digging leads one to an obviously shell ‘khoka’ somewhere in the tax haven of Delaware, USA, with no cogent information on the company’s performance globally—barring a mysterious funding of $2 million from, where else, another shell/khoka.
The list goes on. Thanks to lax laws on the subject of deeper enquiry on who or what is really behind a company, the business of khoka and shell companies have brought India to a point where we already do not know who or what is behind the major airlines, airports, telecom provides, seaports, hotels, highway toll collectors, real estate companies and similar. Likewise, we do not know who or what is behind the mysterious army of consultants and analysts providing multiple services at great costs to our country and those who would govern us. We do know, however, that large amounts of money flow in and out in this way, changing colour and provenance at every step.
And on the other end, we, the growing middle class especially, keep paying the bills for these escapades. Our rupee is now reaching 55 to the dollar, and the cost of fuel is going through the roof too, and this can be linked directly to the business of national assets being transferred abroad through these shell companies, while we stay happy with trinkets and baubles thrown our way.
FDI in retail is likely to be the next victim in this move to shovel more of the nation’s assets towards these shell companies. A separate article on that follows.
Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved actively in helping small and midsize family-run businesses re-invent themselves.