Snowden who leaked details of top-secret American mass surveillance programs, is currently in Russia
As expected, the Indian government on Tuesday rejected a request for asylum by US whistle-blower Edward Snowden. Snowden, who is on the run had made the request through the Indian Mission in Moscow three days ago.
A spokesperson in the external affairs ministry said, “I can confirm that earlier today our Embassy in Moscow did receive a communication dated 30 June from Mr Edward Snowden. That communication did contain a request for asylum. We have carefully examined the request. Following that examination we have concluded that we see no reason to accede to the request”.
Snowden, a US former technical contractor for the National Security Agency (NSA) and Central Intelligence Agency (CIA) employee who leaked details of top-secret American mass surveillance programs, is currently in Russia.
Interestingly, WikiLeaks founder Julian Assange had last month claimed that he had sought asylum in India through its mission in the UK. However, external affairs ministry had denied receiving any such request.
Snowden is charged with violating American espionage laws.
His leaks revealed that the US intelligence used a secret data-mining programme to monitor worldwide internet data to spy on various countries, including India.
On 22nd April the Cabinet Committee approved 40,000 additional bilateral seat rights per week to Abu Dhabi. As soon as the bilateral deal was signed, both Jet and Etihad entered into an agreement on 24th April. Is it a coincidence or collusion?
The deal between Naresh Goyal-led Jet Airways and Etihad Airways, the national airline of the United Arab Emirates (UAE) is becoming controversial day by day. According to new information, not only the Director General of Civil Aviation (DGCA) but the Cabinet Committee also played a significant role that benefitted both Etihad and Goyal. While defending the deal on Tuesday, Ajit Singh, minister for civil aviation, said this (Jet-Etihad) was an important deal and those opposing it are long on politics and short on facts.
In a release issued today, the Prime Minister's Office (PMO) said, "There is absolutely no disagreement within the government or between the Ministers and Prime Minister on the matter. The Prime Minister is neither washing his hands off the Bilateral Air Services Agreement nor is the Prime Minister's Office trying to do a U-turn on the issue now."
According to the note issued by the PMO on 13 June 2013 and the minutes of a meeting by P Chidambaram, the finance minister (FM), it has now come to light that all major decisions regarding enhancing the seats and Jet-Etihad deal were taken during the 48 hours between 22nd April and 24th April 2013.
On 22nd April “under the direction of the Prime Minister” the Cabinet Committee approved the signing of the grant of 40,000 additional bilateral seat rights per week to Abu Dhabi, and less than 48 hours later on the 24th of April the bilateral agreement was signed between the two governments. On the same day, 24th April, the announcement and signing of the Etihad-Jet Airways deal was made. Is this merely a coincidence or collusion that facilitated the deal?
What is shocking are the notes from the PM and the FM (copies of which are with Moneylife) contradict each other. The minutes of the meeting held on 22nd April 2013 and signed by P Chidambaram states that the bilateral was mandated under the directions of the PM. However, the note from the PMO says that the PM was concerned with the proposals being made for the bilateral deal with Abu Dhabi. The note also clearly states “the decisions were not taken under the direction of the Prime Minister”. The question then is who is telling the truth?
Earlier, an inter-ministerial group (IMG) had raised objections to the bilateral deal to be entered with Abu Dhabi. However, soon after the IMG meeting, Ajit Singh, the minister of civil aviation approached the PM urgently seeking clearance for the bilateral deal and thus override the objections raised by the IMG. Singh also emphasised that a visit of an official from his ministry was scheduled and the postponement of this (visit) would send a wrong signal. Prime Minister Manmohan Singh then directed Chidambaram to hold a meeting with Ajit Singh, Anand Sharma, minister of commerce and industries and Salman Khurshid, minister of external affairs. This meeting was held on 22 April 2013 itself.
After the meeting Chidambaram and all other three ministers met the PM. The meeting was also attended by Shivshankar Menon, National Security Advisor and Pulok Chatterji, principal secretary.
During the meeting, Chidambaram briefed the PM about the agreement (between India and Abu Dhabi) reached earlier in the day for giving a mandate to the negotiating team to allow an additional entitlement of 40,000 seats per week in a phased manner over the next few years along with the third country code sharing and domestic code sharing.
The PMO raised following issues during the meeting...
1. Although ministry of external affairs and ministry of commerce support this substantial enhancement (40,000 seats per week), the Department of Economic Affairs (DEA) had reservations in the past on the enhancement.
2. It has been reported in the media that some airlines have opposed the request for enhancement.
3. It is also likely that private airport operators would not be supportive of this enhancement as they have invested substantial amounts in the airports at Delhi, Mumbai, Bangalore and Hyderabad and would like these to develop as hubs for air traffic.
4. One of the effects of this enhancement would be that long-distance traffic from India to Europe or North America would be diverted to Abu Dhabi.
5. There is a possibility that if, as reported, an Abu Dhabi airline acquires Jet Airways, this entity would control the bulk of the seats on this route.
6. There is possibility that other countries may also make similar requests.
7. Hence a calibrated approach may be necessary.
After this, Ajit Singh assured the PM that all these concerns were considered while arriving at the enhancement. “His considered view was that these concerns would not have any adverse impact on the Indian aviation sector. The minister was of the view that the additional capacity would enhance traffic to AAI airports where AAI has invested substantial funds in capacity enhancement. While allocating additional entitlements, requests of all domestic airlines would be kept in mind. The minister stated that the air traffic market was growing rapidly and there would be a need to enhance entitlements in any case. In addition, he felt that the overall context of liberalising FDI in civil aviation needed to be kept in mind. Concerns would also be addressed by phasing out the enhancement,” the note from PMO states.
Anand Sharma also mentioned attracting large volumes of FDI and FII from Abu Dhabi to India during the meeting. The note says, “His (Sharma's) view was that Abu Dhabi currently has one of the largest Sovereign Wealth Funds in the world and it is in our interest to take steps to attract these funds to India”.
“The finance minister and external affairs minister were in agreement with and endorsed the views of the other ministers. On the basis of the above, it was agreed to give an ‘in principle’ go-ahead to the negotiating team as per the formulations (40,000 seats per week),” the note says.
Prime minister Singh, then directed that the matter may be brought to the Cabinet for a decision before operationalizing any agreements that may be arrived at by the government with the other party.
However, this decision was implemented within 48 hours and on 24th April the bilateral agreement between India and Abu Dhabi was signed. Soon after signing the bilateral, the long-pending deal between Jet and Etihad was also signed on the same day.
It is therefore obvious that the consideration to be received or received by Jet Airways was clearly linked and co-related to the value of the bilateral that Abu Dhabi was receiving along with its investment in carrier. The sole beneficiary of the largesse of this bilateral deal was Naresh Goyal and Jet Airways and not India as the government wants us to believe.
Last month, the Foreign Investment Promotion Board (FIPB) deferred a decision on the Rs2,000-crore Jet-Etihad deal, the largest foreign investment in the Indian aviation sector, and sought clarity on control and ownership. As per the proposal, Jet Airways plans to sell 24% stake to Etihad for about Rs2,058 crore.
Market regulator Securities and Exchange Board of India (SEBI) and the Competition Commission of India (CCI) have already sought clarity from the domestic carrier on the transaction, to ensure that Etihad’s ownership powers in Jet remain in line with its 24% stake in the company’s equity capital.
On 5 June 2013, Jet Airways chief executive Nikos Kardassis has resigned after a five-year stint with the carrier, and its chief operating officer Capt Hameed Ali was made the interim chief executive.
Reportedly, Etihad has been demanding a change in the management of Jet Airways, including removal of Goyal's wife from the board.
For the quarter ended March, Jet reported deeper losses at Rs495.53 crore against a net loss of Rs298.12 crore for the same period year-ago. Total income from operations declined to Rs3,922 crore in the March quarter from Rs4,041.61 crore in the year-ago period.
For the full fiscal 2012-13, the second largest airline improved its bottomline by narrowing the losses to Rs485.5 crore against a net loss of Rs1,236 crore in FY12.
Tomorrow... Objections of Parliament, SEBI and CCI to the Jet-Etihad deal
EXCLUSIVE: Jet-Etihad deal: What are the Parliamentary Standing Committee, FIPB, SEBI and CCI worried about?
EXCLUSIVE Jet-Etihad deal: Handing over benefits to Abu Dhabi on a platter
A report from CRISIL and AMFI mentions that Monthly Income Plans (MIPs) of mutual funds are better than bank fixed deposits. Is the conclusion based on a flawed performance index?
Ratings agency CRISIL and the Association Mutual Funds in India (AMFI) have jointly launched a family of Mutual Fund Performance Indices. A report describing the various indices titled “CRISIL AMFI Mutual Fund Performance Insights” describes the performance of different category of mutual funds. The report also says that Monthly Income Plans are an alternative to long-term fixed deposits. At an aggregate level, “MIP funds (measured by the CRISIL-AMFI MIP Fund Performance Index) have outperformed the three-year FD index over one, five, seven and 10 year periods”, mentions the report.
In an earlier article we have mentioned that the indices maybe flawed (Read: Is the CRISIL-AMFI mutual fund performance index grossly flawed?). Here again, our analysis has shown that if a saver had put his money in an average performing MIP five years back his returns would have been lower than that of a FD. If he had invested in any of the bottom-rung performers his return would have been much lower than even the post-tax returns of a FD.
Moneylife has analysed MIPs in the past and mentioned that they are avoidable as they have delivered inconsistent performance and bank fixed deposits would provide the same or better returns with a much lower risk. (Read: Bank fixed deposits vs MIPs: Neither monthly, nor income) Over the one year period, the CRISIL-AMFI MIP Fund Performance Index has delivered a return of 8.48%. In our recent analysis, out of the 48 schemes that have been in existence over the past one year, just 22 schemes have delivered a return over 8.48%. The average returns of 48 schemes was 8.33%, much lower than that of the benchmark index which returned 9.06% and the three-year FD index which returned 8.40%. Similarly for the five-year period the CRISIL-AMFI MIP index seems to have delivered a return of 8.79%, whereas, our analysis has shown that the 33 schemes which have been in existence for five years have delivered an average return of just 7.32%. As many as 26 schemes failed to deliver a return above 8.79%, and 16 schemes underperformed the three-year FD index.
In a reply to our email on the methodology, Mukesh Agarwal, President, CRISIL Research, mentioned that schemes that meet a minimum Assets under management (AUM) and history criteria are considered. They also take asset-weighted returns of the schemes and not average returns as he says asset weighted return is the most appropriate and well accepted approach for calculating performance of the total assets managed by the mutual fund industry.
As per the methodology only those MIPs which have a minimum corpus of Rs25 crore and have a track record of three or more years are considered. And asset-weighted returns are calculated. Why is this method flawed? The same reason why the movement of the Sensex is skewed in favour of a few major companies (Read: Why Sensex is not the barometer of the Indian economy). Out of the 31 schemes that fit the criteria of the CRISIL-AMFI MIP Fund Performance Index, the top two schemes as per AUM have a weightage of 57%. The top 10 schemes with the highest corpus contribute over 80% to the total AUM of the selected sample. The bottom half of the schemes have a total weightage of just 12%. Does this truly represent the entire sample of schemes? The top few schemes maybe performing better than bank FDs, but does the lay investor know this? As we mentioned in the beginning, if he invested in any of the bottom performers his return would have been much lower than even the post-tax returns of a FD. The only one benefitting from such flawed metrics here seems to be the fund industry which is now desperate for some intellectual arguments to be relevant.