The beleaguered winemaker’s top UK executives were accused of utilising the company’s British arm’s funds before it entered into a credit-restructuring deal abroad
Winemaker Indage Vintners Ltd, which has staved off the threat of liquidation after agreeing to a restructuring of its huge debts, has said that there has been no misuse of funds in its UK unit and it is conducting an enquiry into all affairs of Santosh Verma, its global director of sales, marketing and business development.
There were allegations that Indage Vintners' chief financial officer Rajesh Chalke and Mr Verma had used company funds through credit card transactions just before its UK-based unit Indage UK Ltd filed for Company Voluntary Arrangement (CVA) in that country. In the UK, CVA is a deal between an insolvent company and its creditors that places a ring fence around the company to keep creditors at bay. It allows a viable but struggling company to repay some, or all, of its historic debts out of future profits, over an agreed period of time.
In an email reply to Moneylife, Ranjit Chougule, managing director, Indage Vintners said, "Specifically, the alleged transactions made by Rajesh Chalke are false and inaccurate. Mr Chalke has already informed the liquidators and the sole banker to the company that, with the exception of one genuine expense on behalf of the company, he is not aware of, neither has he authorised or taken part in any transactions relating to any company expenses allegedly debited to his name and/or account. Anyone who purports to the contrary may do so at their own risk."
In an email sent to Moneylife, a person claiming to be a former employee of Indage UK, alleged that Mr Chalke's credit card was in fact in the possession of Mr Verma. "The demise of Indage in the UK was partly to do with the huge personal expenditure by the directors and siphoning of funds through the credit cards which were used just before the company entered into a CVA, to buy cars and accessories worth about £14,000; gold jewellery (£9,000); flight tickets for people who never worked for Indage UK and personal expenses to the tune of £1,20,000 in total," the person had alleged in the email.
Replying to these allegations, Mr Chougule said, "With regard to Santosh Verma, we have similarly advised as above and are conducting an inquiry into all of his affairs including India as global director of sales, marketing and business development."
There were also allegations that Indage had sold some stock for £2.95 million in Singapore and it was recorded in the account books of its UK unit as an 'international transaction'. However, after nine months, the company instructed the accounts department to reverse the transaction since the other party refused to pay, the email said.
"Unless we receive audited statements of the last financial year of the company which went into liquidation before the company accounts were finalised and audited, we are unable to comment on transactions, if any, that are outlined in brief in your mail," said Indage's MD.
Mr Chougule said that Indage UK went into administration and, subsequently, liquidation due to constraints in working capital from the inception of the acquisition of the business by Indage Vintners Ltd in and around June 2008 and the global financial crisis only worsened the effects of this liquidity shortfall leading to an attempted CVA by the company in December 2009 and the eventual liquidation in March 2010.
Last week, Indage said it had filed a debt-repayment plan in the Bombay High Court. The company had a total debt of Rs400 crore as of March 2010.
In May, Indage told the High Court that its managing director Ranjit Chougule and other members of his family would invest about Rs75 crore in a deal supported by banks led by ICICI Bank Ltd, IndusInd Bank, Allahabad Bank, UCO Bank, IDBI Bank and Bank of Rajasthan.
A combination of the weekend, ‘Friendship Day’ and a single-window release has helped the movie to rake it in
Once Upon A Time In Mumbaai, a film starring Ajay Devgn, has received a house-full response in most multiplexes in Mumbai. The movie has collected approximately Rs21 crore in the opening weekend, according to industry sources.
The movie did not get a very good response on the release day (30th July) and managed to collect Rs5 crore on that day. The crowds started coming in on Saturday, when the film reported a collection of Rs7 crore. The combination of the weekend, 'Friendship Day' and a single-window opening helped the movie to report a collection of approximately Rs9 crore on Sunday, according to industry experts.
Balaji Telefilms has recovered the cost of production of the film in the first weekend itself by strategically planning the release of the movie and drawing a lot of attention by publishing the venture as a story based on the life of smuggler Haji Mastan and India's most wanted fugitive Dawood Ibrahim. Retaliating to the movie being so publicised, Haji Mastan's adopted son Sundar Shekhar (alias Suleiman Mirza), sought a stay on the film's release. The argument was that Haji Mastan was a social worker and a politician and this film defamed him after his death. This drama attracted a lot of eyeballs which has also helped to make the film a success.
"The movie is expected to do well in metros. In Mumbai it will definitely do well because it is related to the metropolis. Balaji Telefilms has come up with a gangster movie after a long time, since the release of Shootout at Lokhandwala. A single-window release has also helped the movie to pull in the crowds," said Sheetal Malpani, analyst, BRICS Securities.
PVR Cinemas reported box-office collections of Rs60 lakh on Friday; Rs80 lakh on Saturday and in three days it reported an approximate net collection of Rs2.5 crore. "We reported 85% occupancy on Sunday across India for Once Upon A Time In Mumbaai," said an official spokesperson from PVR Cinemas.
"It was a decent attempt, but there is no story in the film. When there is no basic story, there is no drama in the movie. It is a very half-hearted attempt. More attention has been paid to the look and the era. The film is mainly glorifying the life of a gangster rather than being a real gangster film," said Amod Mehra, independent trade analyst.
According to industry sources, overall production cost of the movie - including advertising and public relations - was around Rs26 crore-Rs27 crore. Besides multiplex collections, the movie is expected to earn Rs3 crore-Rs4 crore from television rights; Rs1 crore-Rs2 crore from music rights and another Rs3 crore from international rights.
The film, produced by Balaji Telefilms and Popcorn Motion Pictures Ltd of actor Suniel Shetty, depicts the underworld of the 70s and 80s in erstwhile Bombay. It revolves around Sultan (Ajay Devgn) and is based on the time when crime started in the city. The film is directed by Milan Luthria; Sultan labours through his childhood and becomes a smuggler and ends up ruling the sea-routes. However, he is depicted as a smuggler with a 'conscience' who prefers electronic contraband to narcotics. Shoaib (Emraan Hashmi) is inspired by Sultan's life as a child and wants to emulate him. Shoaib is the son of a police officer, but loses his trust in the law. He makes his way into Sultan's gang and eventually climbs up the ladder. After he finally takes over from Sultan, he starts all kinds of crimes that his mentor had never committed.
Aadhaar could be extremely dangerous to freedom and democracy itself, a reason why similar identity projects have been confined to the dustbin by many other democratic countries
Since Aadhaar, that national UID project, seems to be the flavour of the season with news coming out everyday as to how it is turning out to be a bonanza for corporates, and now even the Supreme Court joining in on the Aadhaar bandwagon, I thought, why not pen another article.
To summarise, whichever way one looks at it, I find that Aadhaar is either an idea conceived very naively or it is a fast one pulled on the hapless people of India. Let me elaborate why.
Firstly, any security architect knows that the probability of any computer system getting hacked can never be zero. There is no such thing as 100% security.
Safeguards and backup plans are built into systems for such an eventuality even while taking care that the systems are made as secure as possible. Aadhaar is using biometrics of people which are unique to them. What happens if the Aadhaar database gets hacked and biometrics of a million people are stolen? Even with the best of security experts designing and securing a system, such an eventuality is eminently possible.
The recourses I can think of in case of such an eventuality would be either for Aadhaar to shut down - the million-odd people whose biometrics are stolen can't be given new fingerprints and irises (a recent news report indicates that fingerprints can be surgically replaced in China for a mere Rs15,000) - or for Aadhaar then to use some other forms of biometrics, say DNA for instance. The overall Aadhaar budget would then increase further.
The above fact is considered a major weakness of using biometrics as an ID, in that unlike a password, biometrics is not replaceable.
Secondly, Aadhaar claims to solve the problem of leakage of government aid that is meant to go to the poor. Aadhaar claims to do so by plugging what it says is the problem of fake identities. To be precise, Aadhaar has now revised its stand and said that it will only deal with the issue of identity proof and the problem of fixing issues with government aid have to be dealt by other agencies.
Nevertheless, Aadhaar has used the above issue - that of its application as solving the problem of leakage of government aid - to justify the whole project.
However, Aadhaar hasn't justified the fact that the problem of leakage of government aid is due to fake identities by giving any numbers or data. In fact, discussions with people who claim to know how PDS works say that the grains are siphoned not at the last mile, that is fair-price shops, but from the warehouses themselves, and this is done with connivance from the highest authorities and politicians.
Fake zombie identities are used as an accounting fraud to siphon off grains. According to these people, it is not that the major leakage takes place because multiple end-customers go with fake IDs and buy more grain. I haven't found any precise data or study on what are the various causes of leakages, how specifically siphoning of PDS grains takes places, what are the percentages of each way of leakage and how each one can be tackled. If indeed there are no precise numbers, then it is outrageous on the government's part to spend huge amounts of money without such a study and on a solution that may not even tackle the problem to a substantial extent. In fact, if there is no grain arriving at the fair-price shop because most of it is siphoned off at the warehouse itself, what use is proving the identity of the end customer, which Aadhaar claims to do?
Further, if the black marketers announce that a huge amount of grain is now rotten, how is Aadhaar going to tackle that? Incorrect weighing of grains, frauds in weights and measures, or allocating lesser grains than the entitled amount to the end customer, are other ways of grain-siphoning that a mere identity check, Aadhaar style, can do nothing about.
What seems to be necessary and more important to plug government aid leakage is strict enforcement of law and coming down with a heavy hand on those who siphon grains, irrespective of their position.
The UPA government unfortunately hasn't shown much political will in tackling corruption and it is wishful thinking on its part that with the help of Aadhaar the problem will magically go away.
In fact, as far as government aid is concerned, what Aadhaar could possibly do is to help in directly transferring money to the account of the aid recipient, provided of course there are no security issues with Aadhaar and the project can really stop the problem of zombie accounts in the UID database, a tall order in my opinion and even if solved, would increase the Aadhaar budget by a large amount. For instance, it is well known that fingerprints and irises can be faked, and one way to fix that problem is to use fingerprint readers that detect live fingerprints, and iris readers that detect live irises. Even some of such machines can be fooled. But the idea of direct transfer of cash to aid recipients has been struck down by the Planning Commission because cash can be misused - people may end up spending on alcohol rather than grains, for instance. Also, how many of our
poor are literate enough to operate bank accounts? Touts will exploit this opportunity of operating a bank account on behalf of the illiterate people and extract their pound of flesh from the hapless souls, thus leading to another avenue for corruption.
The third problem that Aadhaar fails to tackle is that of abuse and privacy violations. This perhaps is the biggest danger of Aadhaar.
There are two ways Aadhaar can be abused. On the one hand, the ration shop owner for instance can deny the rightful grains to the customer saying that his/her biometric authentication failed and thereby open a new avenue of corruption here - the bigger abuse could be by the State itself.
While on the one hand Aadhaar has so many challenges to tackle on issues such as security, de-duplication of biometrics etc. If these problems are solved, which if at all they can only be done at a huge cost; the success of Aadhaar can open all doors to future authoritarian rulers to cause havoc.
It is well known that one can easily fake evidence by placing fingerprints at the scene of a crime for instance, and a government that has the biometrics of all its citizens, has complete power on its citizens, and can play havoc with the citizenry. While this may not happen with the current government, there is no guarantee that a future authoritarian ruler won't abuse the system.
Aadhaar could thus be extremely dangerous to freedom and democracy itself, a reason why similar identity projects have been confined to the dustbin by many other democratic countries.
Thus, Aadhaar seems to be in a no-win situation whichever way one looks at it. However, there are surely some entities which are reaping the benefits of Aadhaar. These are corporates and IT companies, and in times of recession, Aadhaar has been god-sent for them. No wonder, all
corporates and even a lot of the media are going ga-ga over Aadhaar.
Since everyone in the corporate world seems to have fallen so much for technology not just because of one's love for technology but also because of the financial benefits that come from projects worth thousands of crores, I was just wondering what could be the next thing that one could use to reap the next big bonanza. Once it is clear that Aadhaar won't solve the problem of government aid reaching the poor because grains get siphoned off from FCI warehouses themselves (by the way, recent news reports indicate that 1/3rd of grain in FCI warehouses gets spoilt), one could think of attaching an RFID tag with each grain of rice and wheat so that one can track its path from the field where it is produced onwards. It could be the next Rs500,000-crore bonanza for the corporates!
It is another matter that Chhattisgarh has created a revolution in plugging leakages in PDS, and it cost them much less. Their solution: empower the people, colour all the trucks carrying PDS grains in a bright yellow colour, and if any truck empties grains in any place other than fair-price shops, people themselves report it to the authorities, who then take action.
(The author has a B Tech from IIT Bombay, and a PhD from Columbia University, New York. He currently runs a start-up, Teknotrends Software Pvt Ltd that does cutting-edge work in the area of network security).