Money Life after Retirement
Senior citizens, too, need to be safe and smart with their money
 
Over the years, longevity is increasing and senior citizens need to be careful about saving and investing their money correctly so that it lasts for 20-25 years after retirement. This is a challenge for most people. Also, increasingly, the world is moving towards more and more interactions through mobile, Internet and computers. While this makes for convenience, it brings its attendant risks. To address these two issues—of safety and investments, Moneylife Foundation conducted a special programme for senior citizens on post-retirement savings and investments. Sucheta Dalal, managing editor of Moneylife and founder trustee of Moneylife Foundation, conducted the first session on ‘safe investing and how not to lose money’. The second session was conducted by Debashis Basu, editor Moneylife and founder trustee of Moneylife Foundation on ‘smart investing’.
 
Ms Dalal highlighted that “Senior citizens trust people very easily and, hence, they are more susceptible of fraud.” This statement was supported by the concept of cognitive impairment which was explained by Ms Dalal in detail. Senior citizens should only invest in regulated offers by SEBI (Securities and Exchange Board of India), IRDAI (Insurance Regulatory and Development Authority of India), PFRDA (Pension Fund Regulatory and Development Authority) and RBI (Reserve Bank of India). Participants took a keen interest in phishing, vishing and identity traps which are rampant online these days. She asked them to keep all conversations with banks documented, store phone numbers and email IDs of relationship managers and managers, at least two levels above them. She suggested that selection of a bank should not be done in a hurry. One should follow some banking tips to keep one’s money safe. 
 
Nomination is a serious issue and it demands close attention. Ms Dalal emphasised that forgotten nominations can lead to great losses. Knowledge about the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 (passed in December 2007) was shared with participants. The Act provides for benefits such as monthly maintenance, faster complaint disposal and levying fines, if children do not take care of parents. 
 
In the second session, Mr Basu explained why concerns of investors are different before retirement and post-retirement. He said that in the post-retirement stage, one should consider the average life span of individuals and plan investments accordingly. Amongst different schemes available in the financial market, Senior Citizens Savings Scheme (SCSS) is a better option than annuities as it pays a higher interest rate; but both are taxed according to your income-tax bracket.
 
Two-part portfolio is an effective investment methodology for people who are retired. One can invest 60% of the total corpus in fixed-income securities and the remaining 40% of the total corpus in diversified equity mutual funds which would work towards beating inflation. 
 
For the fixed-income part, based on one’s individual tax bracket, one can invest in a mix of bank fixed deposits (FDs), corporate FDs, corporate bonds or non-convertible debentures, tax-free bonds and short-term debt funds. For people who fall in 20% and, especially, 30% tax bracket, an excellent option is tax-free bonds from government companies. 
 
The different investment options need to be evaluated for parameters such as safety, ease of investment, post-tax returns, liquidity and interest payment options. The presentations were followed by lively discussions. 

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Coast Guard surveillance aircraft with three crew missing
An Indian Coast Guard Dornier aircraft with three crew members aboard has gone missing, officials said here on Tuesday.
 
Search and rescue operations are on to locate the aircraft, which was last tracked near Karaikal in Puducherry.
 
The aircraft, deployed for surveillance along Tamil Nadu coast and Palk Bay, took off from Chennai airport around 6 p.m. on Monday for a surveillance sortie but did not return.
 
An official statement said the last contact with the aircraft was made at 9 p.m. on Monday.
 
The last known location of the aircraft, as per Trichy radar, was off Karaikal in Puducherry, where it was tracked till 9.23 p.m., 95 nautical miles south of Chennai.
 
Speaking to the media, Coast Guard Inspector General S.P. Sharma said that assigning any reason for the aircraft's disappearance would be "premature".
 
He said an inquiry will be ordered.
 
The crew included Deputy Commandant Vidyasagar piloting the aircraft, his co-pilot and Deputy Commandant Soni and navigator/observer Subash Suresh.
 
"The aircraft was the latest induction in the Coast Guard inventory in 2014 and was being flown by highly experienced crew," an official statement said.
 
Sharma said Coast Guard and Indian Navy ships are conducting search operations, with surveillance aircraft P8I joining in in the effort.
 
The fishing community along the coast also has been alerted to pass on any information regarding the missing plane that may come their way.
 
The latest incident comes months after a Dornier-228 of Indian Navy with three crew members went down in the Arabian Sea off the coast of Goa.

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Who Really Owns NDTV?
In 2009, a Mukesh Ambani group entity took control of NDTV under the guise of a loan agreement. The plan was to find a buyer in “three to five years”. No buyer has been found so far and effectively, NDTV is controlled by the Ambanis
 
In July 2009, Vishvapradhan Commercial Pvt Ltd, a company associated with Reliance Industries Ltd (RIL) gave a loan of Rs350 crore without any interest to NDTV's Prannoy Roy, his wife Radhika Roy and their private holding company RRPR Holding Pvt Ltd. This was a bailout-cum-takeover in the guise of a loan. 
 
The sole purpose of the loan was to repay funding obtained by Roys obtained from a bank, which is barred by the market regulator. Under the agreement signed on 21 July 2009, the Roys were to issue a convertible warrant that equals to 99.9% of the “fully diluted equity share capital of the borrowers (the Roys and RRPR Holdings) at the time of conversion” and the Ambani group agreed to limit their aggregate shareholding to 26%. 
 
Let us unravel for you this wonderfully structured “loan document” which effectively allowed Ambani to take over the company with a few key clauses. 
 
1. Clause 6 of the agreement talks about the warrant; the details of what this mean are a part of Schedule 1, under terms of the warrant. This says “at the sole option of the lender (Ambanis)”, the warrant can be converted into the underlying equity shares “at any time during the tenure of the loan or thereafter without requiring any further act or deed on the part of the lender”.  An agreement, which allows the lender to convert a warrant into share even after the tenure of the loan, can only be a sale.
 
2. The loan/sale had two conditions. First that the Roys would have to transfer 26% of their equity to RRPR Holdings through the sale of 1.63 crore equity shares. Secondly, that a company called NDTV Four Holdings Ltd, would invest $85 million in NDTV Studios Pvt Ltd and this would be brought into the parent company NDTV through a merger or some other means. The agreement does not go into details about what is this holding company and why the pre-condition of bring back $85 million to India, but we learn this is under investigation. 
 
3. Another clue that this loan is actually a sale is in Clause 11. It says that the borrower RRPR Holdings will have only three directors; of these, the lender (read Ambani group) will nominate one. More importantly, there can be no quorum unless this nominee director is present at every board meeting. Of course, there is also an undertaking that the lender will not interfere with the editorial policies of NDTV, but we can surmise how effectively that would work. 
 
4. Clause 19 is titled “Mutual Endeavour”. It says that over the next three to five years the Ambani group and RRPR would look for a “stable” and “reliable” buyer for RRPR who will “maintain the brand and the credibility of NDTV”. It is now over five years since the agreement was signed, which explains the rumours about the possible sale of this crucial holding that is key to the ownership of NDTV. But it also raises another question: were the Ambanis only bailing out NDTV for someone else? Ambani also owns Network 18 group and reportedly has stakes or has offered similar friendly bailout loans to several other media groups, making it among the largest media owners in India. 
 
5. Now let us look at some more corroboration. The agreement on behalf of Vishvapradhan Commercial is signed by Mr KR Raja. A simple google search shows that Mr Raja is the same person, whose private telephonic conversation with lobbyist Niira Radia led to Reliance Industries issuing a profuse apology in June 2011, to P Chidambaram, the then Home Minister.  More about Vishvapradhan Commercial’s transactions and its connection with Reliance is available in this report in Newlaundry and e-magazine. Mr Raja also figures in connection with RIL’s purchase of a stake in NewsX, which was subject of an investigation by the Serious Fraud Investigation Office (SFIO). This was reported by a media website called The Hoot.
 
6. Everybody knows that a loan agreement is concerned about interest and not valuation. This one is different. Schedule 3 (2) and sub clauses b, c and d to the loan agreement deals with issues relating to NDTV and the NDTV Group that need “prior written consent” of the Ambani company. It documents the minimum valuation of the group at Rs1,346 crores; any corporate action below this requires the lender’s permission. 
 
7. Other issues that require such consent pertain to the possible amalgamation, consolidation, merger of NDTV with any other entity,  buyback of equity, reduction or alteration of its share capital or any action with regard to the share capital where by the promoters cease to be in sole control of NDTV and the NDTV group. 
 
8. These clauses make it very clear that NDTV’s promoters can do almost nothing without the consent of the Ambanis. Curiously, none of this is known to the public or to the shareholders and stock exchanges. While SEBI has recently imposed a fine of Rs2 crore on NDTV for a disclosure lapse of I-T notice, the non-disclosure of what it has signed in this loan document appears far more serious. 
 
The iron-clad agreement signed by RRPR and the Roys with Vishvapradhan Commercial in 2009 make it clear that the Ambanis have had complete control over this group. But it is still not clear whether the group is the ultimate beneficial owner. 
 
An email sent to NDTV has elicited no response. This story will be updated if and when we hear from the group. 
 

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COMMENTS

Ankur Mutreja

1 year ago

Your article is not very clear. The followings are the doubts:
1. In Re:" 'at the sole option of the lender (Ambanis)', the warrant can be converted into the underlying equity shares 'at any time during the tenure of the loan or thereafter without requiring any further act or deed on the part of the lender', please clarify whether this clause apply irrespective of payment of loan. You say the loan is interest free; so, what happens if the loan is repayed.
2. What is the tenure of the loan agreement?
3. As per the shareholding pattern dt. March 2015, available on NDTV website, the promoter share, i.e. Roy's and RRPR, is 61%. You say Roys were to issue convertible warrant to the extent of 99.99% of promoters' share, and then that Ambani group agreed to restrict its shareholding to 26%. What do you mean? If Ambani has discretion to convert all warrants, how and why should they it restrict it to 26%?

You have raised more questions than answering them. Why don't you upload the agreement on your website.

Mahesh S Bhatt

1 year ago


Government's Arun Jaitley wanted to give RBI Government multi crore bonds issuance rights to SEBI.

Legal Eagles /Business Media world created 2008 melt down.Be ready for similar replay soon in BRICS.

Challenges are Free Media is myth.Everything is sold/bought.Few integral Executives investigate this stories Salute them.

Well in USA Cisco/Microsoft/ GE/Google etc have their billions in Ireland etc tax havens & US government cannot do anything.God Knows is US Government is supporting them,possibly Yes but question is WHY?

Ans is simple make State Bankrupt insolvent.Get Trillions $$ of loans.Issue bail outs to Banks.Kill Middle class.Beggar neighbours by printing $$ /Euros/Yen bonds & let markets become ineffective for business & have crash with JOY.

So it happens ONLY in India & also in USA.

Where are we going wrong.Values Systems.

Corrupts Rule because Honest are Silent.Let honest cheat get rich & fight with rich.Bad bit possible.

Mahesh

REPLY

tikku

In Reply to Mahesh S Bhatt 1 year ago

Maheshji - very well put--SO___democracy does not seem to suit India--at least for a few years--We need a real man on top-- NOT Banias--

Rajat Narain

1 year ago

An interesting story. However it is unclear as to why Moneylife , if it is in possession of the concerned loan agreement , it choses not to send it to SEBI/SFIO .

Rajat Narain

tikku

1 year ago

We know , medias are biased to political parties as they have to earn as well as survive. But NDTV, despite being owned by Reliance, is definitely not biased to BJP despite being a big business house. Another channel I watch is Times now. Rest of the TV channels are are busy worshipping, forecasting or praising Modi and the BJP and not worth wasting time on.

tikku

1 year ago

We know , medias are biased to political parties as they have to earn as well as survive. But NDTV, despite being owned by Reliance, is definitely not biased to BJP despite being a big business house. Another channel I watch is Times now. Rest of the TV channels are are busy worshipping, forecasting or praising Modi and the BJP and not worth wasting time on.

tikku

1 year ago

We know , medias are biased to political parties as they have to earn as well as survive. But NDTV, despite being owned by Reliance, is definitely not biased to BJP despite being a big business house. Another channel I watch is Times now. Rest of the TV channels are are busy worshipping, forecasting or praising Modi and the BJP and not worth wasting time on.

Angad Singh

1 year ago

where is the proof of all this?

Kp Sudhakar

1 year ago

Reading a real journalist's article. Now it's upto the GoI and its Regulators to investigate and publish the truth. If Ambani invests in most of the media, what we get from MSM, is only trash!Afraid to call banana republic. It appears to me that as a Society we need more time to evolve to higher level.

Amit Kumar

1 year ago

You have proved that Ambanis have a 26% stake in NDTV but you have not proved that they have the majority shares or control.

Dipankar Pal

1 year ago

Something is missing here. The way Kejriwal abuses Ambani and the way NDTV promoted Kejriwal in that interview and the way NDTV abuses Modi, it doesn't seem to me that Ambanis control NDTV. Maybe they will and they should.

I will be quite happy to have the media channels under Ambani and other industries, rather than under the round tripped black money of Congress people.

REPLY

Ram Krishna

In Reply to Dipankar Pal 1 year ago

Now you know how statesman like is Mukesh! For him Kejri is a small mouse reared for green snakes in a garden that also has rattle snake, black mamba, pythons and cobras.
An astute bridge and poker player, Mukesh knows very well that revealing your intentions is a blunder in business that depends so much on sentiments.

Vikram Dhotre

1 year ago

For news I only trusted Prannoy Roy's NDTV, even after the tapes of 2G scam with one of its personnel. This article makes me wonder is there any credibility left in any TV news channel. I salute you for a great article !

Anand Thite

1 year ago

Commendable article- as always. Can you also please advise who is the ultimate owner of India Today Group (Aaj Taak, Headlines Today)?? This may explain some of the reporting by these channels. Prasunn Bajpai was seen fixing interview with Kejriwal and after few months he gets an award !!

Ashoka.kalgude

1 year ago

Why SEBI/Govt?compay laws allow such murky dealings? There is no limit of level of subsideries one companies create. India's sovernity and govt is aloways in dangers with one entity controliing the media. Still there are entities whose ownership is neverknown, I feel india is still a banana republic. Our lawmakers are not wise enough.

Ashoka.kalgude

1 year ago

There is real danger to Indian, govt,sovernity by one man contolling media. There should be a law to limit the multilevel of sunsideries companies. Ambanis ky ownership patter is murkiest. why SEBI/company act allows it?

Eric Pinto

1 year ago

A sad fact that corporates can but the media at will !

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